Welcome to the IRADIMED CORPORATION Fourth Quarter 2025 Financial Results Conference Call. 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 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 the 3870 pump deal average selling price will increase 10% to 14%. And yes, the 3870 design 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 our key growth driver for the next several years. Recall how the older 3860 model delivered approximately 20% growth in fiscal 2025, driven by simply limiting our extended maintenance offering to pumps under 7 years old. This minor change generated replacement orders for only a portion of pumps in that age group, but that resulted in significant revenue growth from pump sales in 2025. The promising news is that there remain a majority of these 7-plus-year-old pumps to be replaced, plus many more that are 5 years and older. In the U.S. market alone, there are approximately 6,400 5-plus-year-old 3860 and 3861 pump channels that are up for replacement. We currently sell approximately 1,100 such channels annually into the domestic market. And we'll be targeting adding an additional 1,000 channels per year through replacement sales from those existing 6,400 units that are over 5 years old. This will be our target starting in Q2 and continuing through the rest of 2026. It's also important to understand that replacing only 1,000 channels per year leaves many thousands more to be replaced over the coming years. For our domestic business only, selling north of 2,000 3870 pump channels annually, with the higher anticipated average selling price, we expect to approach a $50 million annual revenue run rate for pumps. With the addition of disposables and maintenance, international sales and the MRI monitoring business, one can understand our confidence in achieving a $100 million-plus revenue run rate during 2026. As planned, in December, we delivered an initial order of 23 3870 systems, for which we are providing an extraordinary level of clinical support and monitoring through February and into early March in an effort to ensure the most stable and highest quality exists in the device before the larger general sales release, which shall start in April. Bearing in mind the time required for our hospital customers to be sold, approve funding, issue orders and such, we expect bookings to build in Q2 and ramp significantly in the second half of the year. We expect to maintain quarterly revenue in the first half of 2026 driven by growth in MRI monitoring and our 3860 pump backlog. But we also anticipate booking strength of the 3870 systems, which will result in those initial shipments in April of approximately 100 to 130 3870 pump channels. I'd like to turn the call over to Jack Glenn, our CFO, to review the quarter's financial results. Thanks, Jack.

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, $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.

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

Congratulations on a strong end to the year. Roger, could you share your thoughts on the initial market response from the pilot conducted this year? What feedback have you received, and how has it impacted your decision regarding the launch of the 3870 in the first and second quarters?

Good question, Frank, it's great to talk to you. Yes, it's been very positive, so let me provide some more details. We've been demonstrating the pump to more people than just the initial user of the 23 pumps. We already have additional orders in place, perhaps another 15 or 20 pumps. We launched this to our sales team about a week ago, and prior to that, we had a few specialists in our sales team showcasing the product to select customers during November and December. The feedback has been impressive. Regarding our main user, which is not quite a beta site since they have FDA-approved products, they've been using our older pump for a long time. They're excited about the improvements in the new pump. The individuals we've shown it to, who are familiar with the old pump, are also very enthusiastic about the new version. Just last week, one of our anesthesiologists from a long-time large user in the Boston area, who uses the pump daily in the MRI environment, expressed great excitement about the enhancements. The product is very appealing and user-friendly, representing a significant upgrade since the previous design is almost 20 years old. This is a bold new step, and we believe demand will be high. We wanted to conduct a couple of months of testing with our initial large user to ensure everything is polished perfectly since we're expecting a strong response once we begin shipping.

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 higher average selling price, we 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. Lastly, what’s next for the R&D team now that the 3870 has launched and is beginning to scale? What are the R&D team’s upcoming projects, and how should we approach that effort?

We have not taken a break, Frank. In fact, we began working on the next-generation MRI monitor a few months ago. The current monitor we launched about seven years ago, and we are planning to introduce the updated version to the market in 2028. We have already dedicated around six months to this project, and it is the next significant item on our agenda.

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 the recent past?

Sure, I can elaborate on that. We expect that the growth in disposables will align with our capital investments, and we hope to see that reflected moving forward. One key aspect to note is our belief that we can enhance utilization with the 3870 model. This improvement will largely depend on factors like the user interface that we've previously discussed. We aim to sustain growth, and potentially even accelerate it, as we progress 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, we are managing the 3860 inventory as effectively as possible. We aim to avoid excess stock during this transition, while ensuring we can meet our backlog moving forward. We're keeping a close eye on the situation and feel we are in good condition. As we move ahead, we are also incorporating the 3870 inventory, which is evident in the inventory figures you see for Q4 due to the significant amount we brought in in preparation for shipments. The challenge will be managing the transition from the 3860 to the 3870, which will primarily take place 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?

We anticipate that the purpose of our preview launch was to gather genuine feedback from real users in order to make final adjustments. We have been making some changes here and there to ensure it's optimal for our target user. That's the main reason for 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, we expect to receive CE mark by the end of the year. We're also working on Japan, but it will take some time. It likely won't be cleared in Japan until next summer.

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.