Hyperfine, Inc. Q1 FY2026 Earnings Call

Good afternoon, and welcome to the Hyperfine Inc. Q1 2026 Earnings Call. I am Frank, and I will be the operator assisting you today. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press *1 on your telephone keypad. If you would like to withdraw your question, press *1 again. Thank you. I would now like to turn the call over to Webb Campbell with Gilmartin Group. Please go ahead.

Thank you for joining today's call. Earlier today, Hyperfine Inc. released financial results for the quarter ended March 31, 2026. A copy of the press release is available on the company's website as well as on sec.gov. Before we begin, I would 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 and 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 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, 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 these 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 today's live broadcast. 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. The first quarter was a strong start to 2026 as we executed across our commercial and financial priorities. We delivered revenue of $3.9 million, our second-highest quarter ever, up 83% year-over-year. Q1 was our third full quarter selling our next-generation subsystem in the U.S. market and selling into our new neurology office business. We posted a 51% gross margin and demonstrated operating leverage and spending discipline, closing the quarter with a strong balance sheet. We also achieved several important milestones. We obtained CE and UKCA marks for the next-generation subsystem and our advanced Optive AI software. We significantly increased enrollment in our contrast PMR study, which is now at over 50% of our enrollment goal. We launched our advanced DWI Optive AI software at the 2026 International Stroke Conference supported by a paper published in SPINS demonstrating the subsystem's enhanced stroke detection capabilities. And lastly, we saw compelling data from our NEURO-PMR study presented at the American Society of Neuroimaging highlighting broad clinical utility, high diagnostic value, and a strong patient preference with the subsystem in neurology offices. With our strong execution in the first quarter across revenue, gross margin, cash burn, and milestones, we are reiterating our guidance to deliver transformative growth, healthy margin expansion, and lower cash burn for Hyperfine in 2026. Commercially, demand for the next-generation subsystem remains strong, and we continue to diversify revenue across our three business verticals: hospitals and health systems, neurology offices, and international markets. I will now walk through updates from our three business verticals in more detail. In our hospital business, we are driving sales of our next-generation subsystem with high interest from adult and pediatric critical care and emergency departments. We are also leveraging positive clinical and economic impact data from early adopters to expand our footprint and increase utilization across sites of care in the hospital. Programs launched since the introduction of our next-generation system have demonstrated high utilization and positive clinical and economic outcomes. Strengthening our foothold in the hospital, at the International Stroke Conference in February we launched our advanced DWI Optive AI software, extending our value in stroke workflows to the emergency department and across hub-and-spoke networks. The advanced DWI Optive AI software is now implemented in most scanners across our installed base. We continue to advance our health system and IDN strategy, and are seeing repeat sales within IDNs across multiple sites over the last couple of quarters. Our pipeline continues to shift toward multiunit and IDN opportunities. The leverage from selling into IDNs is a key part of our strategy to drive adoption of our technology across hospitals. These strategic accounts represent attractive expansion but have longer sales cycles with additional system-wide stakeholders and steps in their procurement policies. In our office business, placements were a solid contributor to our revenue performance this quarter. Following strong exposure and market activation work at the American Society of Neuroimaging and NeuroNet meetings, in Q1 we have had mostly next-generation subsystem placements in larger offices. We continue to build a healthy pipeline across practices of varying sizes. Also during the first quarter, data from NEURO-PMR was presented at the American Society of Neuroimaging. In neurology offices for NEURO-PMR, the Swoop system was used for patients across several neurological conditions, including headaches, dementia, multiple sclerosis follow-up, and tumor follow-up. The study shows the high diagnostic value of the subsystem in this setting and the patient experience with the subsystem was rated very favorably compared to conventional MRI. Turning to our international business, in Europe our Optive AI software was launched during the quarter and has seen strong reception. In India, the first two systems are now live in clinical use at a leading center in Delhi through our distribution partner. Additionally, we are very excited to have received CE and UKCA marks for our next-generation subsystem with the latest version of Optive AI software. We are working to complete all translations and documentation processes to be in a position to launch in Europe in the third quarter. This has positioned us for a stronger second half of 2026 internationally. Looking ahead, we remain committed to increasing the clinical value of the Swoop system through technology, innovation, and clinical evidence. We plan on introducing the next software upgrade with additional improvements in image quality and clinical capabilities by the end of 2026. Driven by clinician interest, we are also evaluating and conducting pilot activities in new sites of care for our subsystem, namely the use of the subsystem in the operating room or angiography suite to support timely scanning of patients following procedures, as well as the use of the Swoop system on mobile units for community-based brain screening programs. Finally, I would like to provide an update on our contrast PMR study. I am happy to share that enrollment is progressing well with three study sites now active and enrollment over 50% of target. Over the long term, we believe expanding the subsystem indication for use to include contrast is of value in all sites of care as it will increase clinical utility. Brain scans with contrast represent a meaningful percentage of all brain MRI. As a reminder, the contrast PMR study is a prospective multicenter clinical study designed to evaluate the feasibility and visualization benefits of contrast-enhanced ultra-low-field portable MRI. We currently expect the study to support a potential submission by 2026 to expand the subsystem's intended use to include gadolinium-based contrast agents. Also, a contrast indication can further support the office opportunity as cases in offices are elective and use CPT codes for reimbursement; brain MRI exams with contrast are reimbursed using a dedicated CPT code for contrast brain MRI. I am very pleased with the strong market traction we continue to generate and the level of image quality the subsystem provides. I am proud of the Hyperfine team's execution not only in the last quarter, but over the last two years, delivering numerous milestones to get to this point. We continue to see our business progressively strengthening through the year, and I remain confident in our commercial traction pipeline and opportunity. With that, I will turn the call over to Brett to review our financial performance and guidance.

Thank you, Maria. I will recap our financial results for Q1 2026 before providing an update on our guidance. Revenue for Q1 2026 was $3.9 million compared to $2.1 million in Q1 2025, representing an increase of $1.8 million or 83% year-over-year. In the first quarter, we sold 10 units versus 6 units in the prior-year period, with contributions across all three business verticals. The majority of unit sales were our next-generation system, supporting a strong average selling price. Gross profit for Q1 2026 was $2.0 million compared to $0.9 million in Q1 2025. Gross margin was 50.7% compared to 41.3% in the prior-year period, representing approximately 940 basis points of gross margin expansion. This is the third straight quarter with gross margin exceeding 50% and we believe we are well-positioned for meaningful margin expansion as we scale. R&D expenses for Q1 2026 were $3.8 million compared to $5.0 million in Q1 2025, a decrease of approximately 24%. We continue to realize the benefits of the reorganization completed in 2025 as we transition to a commercial growth-stage organization. Sales, general, and administrative expenses for Q1 2026 were $6.7 million, flat compared to Q1 2025. We continue to operate with one U.S. sales team covering both the hospital and office market opportunities and are focused on driving sales productivity and operating leverage. Net loss for Q1 2026 was $8.6 million, equating to a net loss of $0.09 per share, compared to a net loss of $9.4 million or $0.12 per share in Q1 2025. The first quarter 2026 net loss included a $200,000 loss from a noncash change in the fair value of warrant liabilities compared to a $1.6 million gain in Q1 2025. Net cash burn excluding financing in Q1 2026 was $8.8 million compared to $10.1 million in Q1 2025, an improvement of $1.3 million or approximately 13%. The first quarter is typically our highest cash-burn quarter during the year due to several annual one-time payments such as annual bonus and insurance. Reducing our cash burn remains a significant focus and we will continue to prioritize spending discipline and improve operating leverage in 2026. As of March 31, 2026, we had $40.8 million in cash and cash equivalents on our balance sheet. This cash balance is inclusive of the $15 million initial tranche under the up-to-$40 million long-term debt facility put in place during the first quarter. In addition to the $15 million initial tranche, we have the option through 2027 to access additional tranches totaling up to $25 million upon achievement of prescribed commercial targets. Now turning to guidance. We are pleased to share that we are tracking well to achieve our financial outlook for the year and we are reiterating those growth and margin plans today. We continue to expect revenue between $20 million and $22 million, representing year-over-year growth at the midpoint of 55%. Our pipeline remains strong across our three business verticals, including several multiunit hospital and IDN opportunities, and the second-half 2026 launch of our next-generation Swoop system in Europe. We continue to expect revenue to progressively strengthen through 2026. We continue to expect gross margin to be in the range of 50% to 55% for the year. We expect gross margin to improve over the course of the year as sales volumes increase, and expect second-half gross margin percentages to exceed the first half. We remain optimistic that we can sustain gross margins above 50% as we execute on our growth initiatives. We continue to expect total cash burn to be in the range of $26 million to $28 million for the full year 2026, representing a 10% year-over-year decline at the midpoint. This cash burn guidance includes our quarterly debt payments of approximately $400,000. We will continue to be disciplined with our spending while investing in commercially oriented projects and initiatives. Lastly, we continue to see a healthy cash runway extending into 2028 reflecting the strength of our balance sheet and our continued focus on operating leverage and disciplined capital management. This cash runway expectation is inclusive of the $15 million initial tranche of debt financing but exclusive of the additional $25 million of growth capital available under that facility. We remain committed to spending discipline while investing in our highest-priority commercial, clinical, and technology initiatives as we scale. We believe we are executing upon an important phase of growth, supported by a strengthened financial profile and a commercial-stage operating model. We are positioned as a de-risked medical imaging platform with multiple durable growth catalysts across large, underserved sites of care, supported by a compelling value proposition, robust pricing, attractive gross margins, and improving sales productivity and operating leverage. I will now turn the call back to Maria for closing comments.

Thank you, Brett. Before we open the call for your questions, I want to take a brief moment to reflect on our progress. It has been just under one year since we received FDA clearance for our next-generation subsystem and Optive AI software. In these three commercial quarters since, we have meaningfully improved our revenue and margin profile, entered new markets, and continued to innovate. I am proud of what the team has accomplished, and we remain energized by the opportunity ahead as we expand access to brain MRI across hospitals, neurology offices, and international markets. With that, we are happy to open the call to your questions. Operator, thank you. We will now begin the question-and-answer session.

If you would like to ask a question, please press *1 on your telephone keypad to join the queue. If you would like to withdraw your question, simply press *1 again. Participants may ask one question and one follow-up during their turn and can join the queue again after that. Thank you. Your first question comes from the line of Frank Takkinen from Lake Street Capital Markets. Please go ahead.

Hey, this is Nelson Cox on for Frank. Congrats on all the progress and for taking the questions. Maybe just starting with the IDNs and the multiunit ordering a bit more. Can you maybe talk a little bit more about the typical decision criteria and timelines you are seeing there? And how many of these IDN conversations are at that standardization stage versus kind of the single-site pilots? And then is there some assumption in guidance of these single-site pilots standardizing deeper in 2026? Or how is that?

Sure, Nelson. I will take a crack at it, and Brett can add any commentary. So again, remember, we have only had the next-generation subsystem for three quarters, so our history with it and the strategy is about three quarters deep. I can tell you there is an IDN that has moved from the first site to multiple sites — one to a second site and to a third site. The rest of the conversations are at the beginning of the first-site initial placement. We have an appreciation of the process, which is slightly more involved than a single-hospital process in that there is either a regional, divisional, or national level of approvals and procurement steps that need to be fulfilled. We expect that once we land the first system, similar to what we have experienced already, it takes implementation plus probably two to three months of data before the rest of the sites that are interested will move forward with their own procurement processes. We do have visibility to multiple sites within an IDN; it is not that we need to start the selling process, but we are not going to be able to start the procurement process for the additional sites within an IDN until the first one goes through implementation and initial data collection for about, call it, eight weeks or so by the time this data gets tabulated and shared across the IDN.

I was going to comment on your question about the guidance and what is baked in there. For our 2026 guidance, it reflects the three initiatives and growth vectors of the business: the hospital, which includes the IDN, the office business, and international. All of them are contributing towards the growth that we see in our 2026 guidance. I will highlight that, as Maria mentioned, given when we got clearance for the next-generation system, we see the second half of the year being more aligned with budgetary cycles, especially for these IDN initiatives.

Okay, that is helpful. And then maybe on the office, can you help us think about the profile of your adopters there so far and maybe some encouraging signals you have seen? I know you mentioned the healthy pipeline across varying sizes, but maybe talk about what is resonating within the larger offices more specifically, and then how the pipeline in smaller practices may vary.

Sure. I will start with that as well, Nelson. We were predominantly placing next-generation systems in larger offices. The larger offices are usually grouped under a larger practice or group and their annual meetings in February generated good leads and interest that translated into deals in the first quarter. The NEURO-PMR data showing multiple utilities of the subsystem resonates very well because the more utility they see across their patients, the easier it is to justify the investment and see the return on investment by bringing this in as an ancillary service to their practice. By definition, a single-practitioner practice has lower volume and often has either a little bit of specialization or a little bit of everything but has fewer resources. Over time, the larger offices are likely to have the volume that makes the investment attractive and translates into an attractive return and an attractive additional business. Brett, I do not know if you have anything else to add.

No, I think you covered it well.

Okay. I will stop there. Thank you, guys.

Sure. Thanks, Nelson.

Your next question comes from Yuan from B. Riley Securities. Please go ahead.

Well, thank you for taking our questions. Maria, can you comment on what you are hearing related to the helium shortage in the U.S. and whether that has impacted any interruptions with potential customers recently?

Thank you, Yuan. Our system does not use helium, and to a certain extent we always emphasize our system's maintenance simplicity and lower ongoing costs. We make sure people understand that our system is helium-free. I have not heard customers say they are delaying purchases because of helium availability. We often hear our customers talk about challenges when their high-field magnets are down for maintenance; our system comes in very handy in those times. But there has not been much of a surge in noise around helium availability that I have heard. Brett, do you have anything to add?

No, I think you highlighted it well — being helium-free, being able to be plugged into a standard wall outlet, being portable, and requiring no shielding or construction are elements we've highlighted for years. The recent news about helium shortages just amplifies that value proposition, but it has been part of our overall message when we talk to hospitals and sites.

Got it. I am learning from the recent use case from the recent stroke care seminar: when your team sells Swoop to a new customer, what are the key economics, the numbers that you want to highlight? For example, the ROIs, backup options, or freeing up other devices. What are the main characteristics you highlight?

Sure. Starting with the stroke use case, the most important piece of data that helps potential customers understand value is the wait time in suspected-stroke patients for an MRI. There's a bit of a joke we make about the spreadsheet: for patients who come into an ED with symptoms of stroke, how many hours did it take you to get them into MRI? Unfortunately, those numbers with high-field scanners are sometimes very high — 40, 60, or even 80 hours in some settings. The number one question is how much we can shorten that, and that builds a strong case for faster triage. The PRIME study out of Yale similarly looked at all comers in the ED and how much faster patients get an MRI when needed. We also highlight the ICU use case, which is all about cost savings. We ask customers to run the numbers on how much they spend on MRI-compatible tubing, pumps, and other consumables required to safely transport and scan critically ill patients in high-field MRI. Shortening the time to MRI plus savings on those MRI-compatible supplies quickly builds a case for a roughly one- to 1.5-year ROI that we have discussed, even with our current MSRP of $590,000.

Yeah, that is very helpful. I will hop back in the queue.

Thank you, Yuan.

And your next question comes from the line of Maria from BTIG. Please go ahead.

Good afternoon, Brett and Maria, and congrats on the progress here. I wanted to ask quickly about the contrast PMR study — really pleased to hear the progress. Wanted to understand what you think the impacts of having that gadolinium contrast capability will be on adoption in the hospital and office channels. I guess another way of asking it is how often are purchases getting put off because a doctor says they want to wait for the contrast indication?

Great question. I cannot think of any case in a hospital environment where the purchase has been put on hold awaiting contrast. There is a lot of excitement from both sites of care, hospital and office, for the use because a substantial number of scans are performed with contrast. What I am most interested in is the ability for clinicians to trust the device to cover most of their cases. Today, if they want to use contrast with our system in the hospital environment, they do so off label. A contrast indication will increase utility and make multiple systems more necessary, because sharing systems will be more challenging when more cases can be covered by our device. In the office, adding contrast cases at higher reimbursement rates — roughly 30% to 50% higher — will change the economics and shorten the time needed for practices to make the investment turn into a profitable ancillary business. Does that make sense?

It does. That is a great amount of detail, I really appreciate it. I will use my follow-up to try to dive a little more into what you hinted at in terms of new sites of care in the hospital, like the operating room and the angiography suite. Are there new accessories, new sequences, new indications, anything that you need to be able to move into that environment, and any timelines, even very general, that might be helpful for us?

Thank you, and thank you for asking because it is really exciting to see the surge in interest from surgeons and interventionalists in the neuro space to bring the subsystem into their environments. We will see publications and presentations this year of single cases and small case series from pioneering sites that have already brought it in for immediate post-procedure imaging with significant benefit across a number of cases. We are assembling an advisory group and would like to exit this year with a plan that answers whether the necessary changes are primarily in software, a modification of the coil (a hardware component), or more extensive accessories. For example, cranial access while the patient is in the scanner may require coil adjustments. That is only one component and not quite an accessory but a hardware modification. The plan will be the result of exposure to initial cases and the work we will do with our initial advisers, forming a plan for us by the end of this year. There are already cases where the surgeon is driving the decision in a hospital for immediate postoperative scanning in the OR. If we want this to be more incremental — for example, intraoperative or preoperative use — it will take more work. I will know more probably in the next couple of quarters.

There are no further questions at this time. I would now like to turn the call back over to Maria Sainz for closing remarks. Please go ahead.

Thanks, everyone, for joining us today. We look forward to continuing to update you on our future progress, and have a great rest of your day.

Ladies and gentlemen, thank you all for joining, and that concludes today's conference call. All participants may now disconnect. Thank you.