Earnings call transcript: Iradimed Co reports strong Q1 2025 earnings, beats EPS forecast

Iradimed Co, a medical device company with a market capitalization of $685 million, reported robust financial results for the first quarter of 2025, surpassing earnings per share (EPS) expectations. The company achieved an EPS of $0.42, slightly above the forecasted $0.41. Revenue also exceeded projections, reaching $19.5 million compared to the anticipated $19.13 million. InvestingPro analysis shows the company maintains a "GREAT" financial health score of 3.54 out of 5, reflecting strong operational performance. Following the earnings release, the company’s stock saw a moderate increase of 0.77% in pre-market trading.

Key Takeaways

• Iradimed Co’s Q1 2025 revenue grew by 11% year-over-year.
• EPS of $0.42 beat the forecast of $0.41.
• Domestic sales surged, making up 82% of total revenue.
• The stock price rose by 0.77% in pre-market trading.

Company Performance

Iradimed Co demonstrated strong performance in Q1 2025, marking the 15th consecutive quarter of record revenues. The company reported a revenue increase of 11% year-over-year, driven primarily by domestic sales, which grew by 19%. The gross margin stood at an impressive 76.1%, consistent with the company’s trailing twelve-month margin of 76.94%. According to InvestingPro data, the company maintains exceptional profitability metrics, with a return on equity of 24% and return on invested capital of 23%. These metrics, along with 8 additional ProTips, are available to InvestingPro subscribers.

Financial Highlights

• Revenue: $19.5 million, up 11% YoY
• EPS: $0.42, up from $0.37 in Q1 2024
• Gross Margin: 76.1%
• Domestic Revenue: $16 million, a 19% increase
• International Sales: $3.5 million, a 15% decline

Earnings vs. Forecast

Iradimed Co’s actual EPS of $0.42 exceeded the forecast of $0.41, representing a positive surprise of approximately 2.4%. The revenue also surpassed expectations, coming in at $19.5 million compared to the forecasted $19.13 million. This marks a continuation of the company’s trend of outperforming market expectations.

Market Reaction

Following the earnings announcement, Iradimed Co’s stock price increased by 0.77% in pre-market trading. The stock’s movement reflects investor confidence in the company’s ability to deliver consistent growth. Trading at a P/E ratio of 34.8 and an EV/EBITDA multiple of 27.8, the stock is currently trading above its InvestingPro Fair Value. The current stock price remains within its 52-week range, with a high of $63.29 and a low of $41.6.

Outlook & Guidance

For Q2 2025, Iradimed Co projects revenue between $19.7 million and $19.9 million, with GAAP EPS expected to range from $0.37 to $0.40. The company also provided full-year 2025 guidance, forecasting revenue between $78 million and $82 million and GAAP EPS between $1.55 and $1.65. InvestingPro data reveals analyst targets ranging from $70 to $72, suggesting potential upside. Discover comprehensive analysis and valuation metrics in the exclusive Pro Research Report, available for over 1,400 US stocks.

Executive Commentary

CEO Roger Souci highlighted the company’s revenue growth, stating, "We achieved revenue of $19,500,000, which is an 11% increase over the same period last year." He also expressed confidence in the company’s operational plans, noting, "We are confident in a June, July final certificate of occupancy with plans to begin moving as early as the July 4 weekend."

Risks and Challenges

• Potential delays in FDA clearance for the new 3,870 MRIV pump.
• Decline in international sales poses a risk to diversification.
• Tariff impacts could affect production costs.
• Economic uncertainties may influence healthcare spending.

Q&A

During the earnings call, analysts inquired about the company’s strategy for managing the growth in disposables revenue and the backlog for IV infusion pumps. Executives also addressed questions regarding the FDA clearance process for the new pump and the refocusing of the monitoring systems sales strategy.

Full transcript - Iradimed Co (IRMD) Q1 2025:

Conference Call Operator: Welcome to the Amerit Corporation First Quarter of twenty twenty five Financial Results Conference Call. Currently, all participants are in a listen only mode. And at the end of the call, we will conduct a question and answer session. This call is being recorded today, Monday, 05/05/2025, and contains time sensitive accurate information only today. Earlier, Eradimit released its financial results for the first quarter of twenty twenty five.

A copy of this press release announcing the company’s earnings is available under the heading News on their website at aretement.com. A copy of the press release was also furnished to the Securities and Exchange Commission on Form eight ks and can be found at sec.gov. This call is being broadcast live over the Internet on the company’s website at iradimid.com, and a replay will be available on the website for the next ninety 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.

ERADERATOR 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 reports filed with the Securities and Exchange Commission, which may be obtained free from the SEC’s website at sec.gov. I would like to turn the call over to Robert President and Executive excuse me, and Chief Executive Officer of Eradimit Corporation. Mr. Souci?

Roger Souci, President and Chief Executive Officer, IRADIMED Corporation: Thank you, operator, and good morning. Thanks one and all for joining us on today’s call. I am pleased to report another record quarter, making our fifteenth consecutive quarter of record revenues. For the first quarter of twenty twenty five, we achieved revenue of $19,500,000 which is an 11% increase over the same period last year. Gross profit came in at 76.1% with earnings very strong as well, with GAAP diluted earnings per share increasing 16% from Q1 of twenty twenty four.

Performance in the quarter was led by pump shipments, with bookings of our 3,860 MRI IV pump continuing to excel in Q1. But I’m also very happy to report that shipments of our disposables grew well and the bookings in Q1 indicate that our emphasis on the monitoring sales for 2025 can be expected to achieve our plans with this product line as well. Our CFO, Jack Glenn, will walk you through the financial details in a bit, but I’d like to address two other issues. Questions of tariff impact and the FDA, particularly our five ten clearance and DOGE impacts. Starting with the tariff impact, in a word, it’s too soon to tell, but a review of the amount of foreign, specifically Chinese materials we utilize, should provide a background.

As you dive into our gross margin, or conversely our cost of goods, you would see that about 12% of revenue is FOM cost, or the parts and stuff we buy to make our products. Examining this further, we find that about 3% of revenue, a quarter of this BOM cost is connected to high tariff sources. If even in a horrible worst case, if Chinese tariffs should remain at 145%, our 3% cost of such high tariff parts goes to 4.35%. So we do not see the risk of material cost impacts directly from even this current first shot over the bow high tariff that we put in place against China. Still, there are many other indirect effects of tariffs that are very difficult to predict at this time.

For one, there is the threat that we already see with certain suppliers raising their pricing by using tariffs more as an excuse to gouge. We watch that carefully though. We are actively dealing with such tactics and so far are managing those well. The good news thus far is that we do not see our customers reacting or feeling tariff pain. Therefore, we can report that we remain optimistic with the plans and guidance we have given.

As for dose impacts, particularly with the CDRH and FDA, It’s interesting to note that we understand that some 20,000 jobs in this agency alone have reportedly been cut, yet we have felt nothing. We recently filed responses to the 50 or 60 additional information questions FDA asked us a few months ago regarding the 03/2010 ks filed back in October. And within a week, we had an FDA response. This sort of engagement appears very quick, certainly as quick as we have seen, and would indicate that work at the FDA continues to get done. Along the lines of FDA and five ten clearance, we iterate what I explained in prior calls.

This new device, the 3,870 MRIV pump, will be a 2026 revenue story. We are on track and remain expecting a clearance in mid-twenty twenty five. However, we expect only light revenue from this new device in Q4 of twenty twenty five. As the sell and shipment cycle is measured in months, even for an exciting and anticipated new offering. Moreover, as witnessed by the strong and continuing sales through customer replacement of the older 3,860 IV pump, driven by discontinuing offering our extended maintenance on pumps seven years and older, the new 3,870 pump sales are expected to dwarf sales of this older model as the quarters progress through 2026 and into 2027 certainly.

Finally, with regard to our new facility under construction, I’m pleased to report that we are at the finish stage with only minor material supply disturbances, which the GC has managed to mitigate well. At this point, we are far enough that potential surprise material cost impacts are well behind us. We are confident in a June, July final certificate of occupancy with plans to begin moving as early as the July 4 weekend, with full operations in the new building by the July. Now I’d like to outline what we expect to see in Q2 twenty twenty five. As the second quarter twenty twenty five financial guidance, we expect revenue of $19,700,000 to $19,900,000 with GAAP diluted earnings per share of $0.37 to $0.40 and non GAAP diluted earnings per share of $0.41 to $0.44 We reiterate our 2025 revenue guidance of 78,000,000 to $82,000,000 for the full year.

GAAP diluted earnings per share of $1.55 to 1.65 and non GAAP diluted earnings per share of $1.71 to $1.81 Now, I’ll turn the call over to Jack Glenn, our CFO, to review the quarter’s financial results. Thank you, Roger, and

Jack Glenn, Chief Financial Officer, IRADIMED Corporation: good morning, everyone. As in the past, our results are reported on a GAAP basis and non GAAP basis. You can find a description of our non GAAP operating measures in this morning’s earnings release and a reconciliation of these non GAAP measures to the GAAP measures on the last page of today’s release. For the first quarter of twenty twenty five, we reported revenue of $19,500,000 an 11% increase compared to $17,600,000 in Q1 of twenty twenty four. This growth was driven by sustained demand for our IV infusion pump systems, which grew 16% to $6,000,000 and disposable revenue, which increased 23% to $4,900,000 Patient vital signs monitoring systems revenue remained steady at 6,500,000.0 Domestic sales accounted for 82% of total revenue in Q1 twenty twenty five, up from 76% in Q1 of twenty twenty four.

Domestic revenue increased 19% to $16,000,000 while international sales declined 15% to $3,500,000 Device revenue increased 9% to $13,000,000 in the first quarter, driven by the increase in pump revenue and FMD systems. Revenue from disposables increased 23% in the quarter, reflecting higher pump utilization. And service revenue remained stable at $1,000,000 The gross margin was 76.1% for Q1 twenty twenty five, consistent with Q1 of twenty twenty four, as we continued to manage our production cost effectively and maintain our ASPs for both products. Operating expenses were $9,400,000 or 48% of revenue compared to $8,600,000 or 49% of revenue in Q1 of twenty twenty four. The dollar increase was primarily driven by higher general and administrative expenses, up 16% to $4,600,000 due to a rise in legal and professional costs tied to the regulatory effort for the new pump and increased personnel and benefit costs.

Sales and marketing expenses increased 9% to $4,200,000 reflecting all domestic sales territories being filled and higher commissions from strong domestic bookings in Q1. Research and development expenses decreased 24% to $600,000 as we finalized key development phases for the 3,870 pump. Operating income was $5,400,000 or 14% increase from $4,700,000 in Q1 of twenty twenty four, maintaining a solid operating margin of 28%. We recognized a tax expense of $1,300,000 resulting in an effective tax rate of 21.2% for Q1 twenty twenty five, compared to 21.1% in Q1 of twenty twenty four. GAAP net income was $4,700,000 or $0.37 per diluted share, a 16% increase from $4,100,000 or $0.32 per diluted share in Q1 twenty twenty four.

On a non GAAP basis, adjusted net income was $5,300,000 or $0.42 per diluted share, up 17% from $4,600,000 or $0.36 per diluted share in Q1 twenty twenty four. Cash flow from operations was $4,300,000 in Q1 twenty twenty five, up 10% from $3,900,000 in Q1 twenty twenty four. Free cash flow, a non GAAP measure, was $400,000 down from $3,400,000 in Q1 twenty twenty four due to $3,900,000 in capital expenditures in the quarter, of which $3,500,000 was for the new facility. We expect to spend approximately $3,000,000 more on the facility through its completion in July of twenty twenty five. And with that, I will turn the call over for questions.

Operator?

Conference Call Operator: Thank you. If you would like to ask a question, please press 11 on your telephone. You will then hear an automated message advising your hand is raised. If you would like to remove yourself from the queue, press 11 again. We also ask that you please wait for your name and company to be announced before proceeding with your question.

One moment while we compile the Q and A roster. The first question that we have today will be coming from the line of Frank Takahan.

Frank Takahan, Analyst: Great. Thanks for taking the questions. I was hoping to start with a question on disposables. Obviously, that was a really great number in the first quarter. Was curious if there’s any anomalies in that number.

Was there a catch up in kind of burning down some of the backlog? Is this a new run rate in the disposable line item? Any color around that would be helpful. Thank you.

Jack Glenn, Chief Financial Officer, IRADIMED Corporation: Sure, Frank. I can address that one. I think from the disposable standpoint, what we’ve said in the past, typically, we would expect the disposables to grow commensurate with the capital growth and certainly tied to the pump utilization. Most of that The quarter, there was some working down in the backlog as we strive to decrease our backlog or lead time on the disposable due to making sure we’re meeting customer demand. So we have we did some of that in Q1.

So that played a part in that. But going forward, certainly, I think it’s always a little bit hard to because of the lead times are shorter for the visibility for us. But I would expect it to be sort of in line with kind of the growth overall on the capital side.

Frank Takahan, Analyst: Okay, that’s helpful. And then Roger, you made a comment around the composition of bookings were indicating monitoring sales being in line with your expectations for this year, which I think was implied for that to reaccelerate a little bit as you adjusted some of the incentive compensation around that product. Can you maybe go a little bit deeper into the composition of the backlog and why you feel pretty confident that Monitors is going to recover through the year?

Roger Souci, President and Chief Executive Officer, IRADIMED Corporation: Yeah. Thanks, Frank. Good to hear from you. Yes, as we spoke before previous quarter, right, that we were going to push hard on bringing up the monitor sales in 2025, basically expecting that there’ll be a droop in the pump revenues later in the year. Certainly, once this new pump is cleared, this huge run rate that we’ve experienced in the last go five, six quarters for the old 3,860 pump, then it will come to an end.

And so as we mentioned, you know, at least a quarter ago for 2025, we really did reemphasize the monitor with the Salesforce vis a vis, you know, commission structure and just, you know, highlighting it, at our meeting in January, etcetera. And, that is showing fruit. We did well, bookings were strong in Q1. Usually Q1 is kind of weak generally after a good big Q4 finish, but monitor bookings in Q1 held up, the rate that they had ended Q4 at. And thus far, there were only, not even five weeks into this Q2, I can tell you that the bookings for the monitor have been very strong already for the start of Q2.

That’s why I mentioned, it looks like our plans are firming up as we expected along the lines of increasing the monitor bookings.

Frank Takahan, Analyst: Great, great. That’s great color. And then just one last one, wanted to follow-up on some of the FDA interactions. I heard your comment that you submitted the file and then you had heard back or submitted the file to answering the questions and then you had heard back from the FDA. What’s left now where we stand today until we should see the clearance occur?

Roger Souci, President and Chief Executive Officer, IRADIMED Corporation: Well, that’s a, if I could read it, I’ll have to read tea leaves, but it’s more or less a guess. So just to refresh, right, we we refiled the 387510 k back in October, and we got an AI letter, oh, relatively quickly after that. I think it’s four or five weeks or so after we submitted, we got a letter with, like I said, 50 plus questions in it. And we worked basically for five months coming up with responses to all those questions. That was returned, I believe, about two weeks ago.

And last week, we started hearing from the FDA interactively, you know, cookie emails, hey, could you find us this in the filing? Hey, did you answer this? You you different phrase than we like to see for this and, you know, port helping them, you know, finalize and clarify some questions that are open in their mind. So we’ll see how that continues. We had two such email questions last week, and we returned those late Friday.

We’ll take it week by week, but there’s two ways that can go. These interactive questions can be a good sign. They get things done quickly without the formalities of a formal AI letter. And that’s generally a good sign. But it could be that they get off the rails again as we go with too many of these sorts of questions.

Too soon to tell, Frank. If all goes well though, this shouldn’t go on for more than three or four weeks. At that point, we’ll know where we stand much better.

Frank Takahan, Analyst: Got it. Okay. That’s helpful. Appreciate the color. Thanks and congrats on the solid start to the year.

Roger Souci, President and Chief Executive Officer, IRADIMED Corporation: Thanks.

Conference Call Operator: Thank you. And that does conclude today’s Q and A session. I would like to turn the call back over to Roger for closing remarks.

Roger Souci, President and Chief Executive Officer, IRADIMED Corporation: Well, you, operator. Once again, it’s been my pleasure to report IRADIMED’s performance for this opening quarter of twenty twenty five. The company’s business foundation is strong and we look forward to attaining our plan for the year as guided. At this point, the execution of those plans is the order of business. And I look forward to reporting our continued positive momentum with the next call.

Until then, thank you all.

Conference Call Operator: Thank you. And you this concludes today’s call, and you may now disconnect.

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