QT Imaging Holdings, Inc. (QTI) Earnings Call Transcript

Welcome to the QT Imaging Second Quarter Earnings Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to your host, Tirth Patel, Investor Relations. Please go ahead.

Thank you. This is Turf Patel with Core IR. Thank you for participating in today's call. Joining me from QT Imaging are Dr. Raluca Dino, Chief Executive Officer; and Jay Jennings, Chief Financial Officer. I want to remind listeners that comments made during this call by management will include forward-looking statements within the meaning of federal securities laws. Any statements that are not statements of historical facts should be deemed to be forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. All forward-looking statements are based on QT Imaging's current beliefs as well as assumptions made by and information currently available to QT imaging and relate to, among other things, QT imaging breast acoustic CT scanner, including its product commercialization and manufacturing, the evolution of QT imaging into a scalable imaging platform, the QCI cloud platform and SaaS model, performance of software enhancements, new product development and introduction and product sales growth and projected revenues. For a list and description of the risks and uncertainties associated with the company's business, please see its filings with the Securities and Exchange Commission. Furthermore, the content of this call contains information that is accurate only as of the date of this live broadcast, August 12, 2026. QT imaging disclaims any obligation, except as required by law, to update or revise any financial or operational projections or other forward-looking statements whether because of new information, future events or otherwise. And now I'd like to turn the call over to Dr. Raluca Dino. Raluca?

Thank you, Tirth, and good afternoon, everyone. Thank you for spending time with us and for your interest in QT Imaging. The second quarter was another strong period of execution for QT Imaging as we continued to scale our commercial business and built the foundation for broader adoption of breast acoustic CT imaging technology. Our mission is to transform breast health by giving women and physicians a better approach to breast imaging. Today's pathway still has important limitation. Namoi can be less effective in dense threats and requires compression. MRI can be costly and Virtusa and conventional Wikistan remains highly operator dependent. QT Imaging has built -- was built to address these challenges with a differentiated 3dimensional imaging platform that is radiation-free, compression free and quantitative. Our vision extends beyond delivering better imaging experience. We are building a platform designed to provide objective, reproducible information that can support more personalized breast health management and over time, enable quantitative biomarkers and AI-driven applications. During the quarter, we shipped 15 breast acoustic city scanners in line with our United States shipment plan and generated revenue of $7.4 million, an increase of 103% compared with the second quarter of 2025. For the first 6 months of 2026, we shipped 28 scanners and generated $14 million in revenue compared to 14 scanners and $6.5 million in revenue during the same period last year. To put that in perspective, Q3 imaging generated no revenue in 2023, $4.9 million in revenue in 2024 and $18.9 million in 2025. With our 2026 revenue guidance of approximately $39 million, we believe this trajectory demonstrates the continued scaling of our commercial business and the growing adoption of acoustic QT imaging modality. Most importantly, more than 12-pound women have now been imaged using breast acoustic city scans today. For us, that milestone is about more than the growth of our installed base. It represents a growing body of real-world clinical experience with our technology and progress toward our ultimate objective, extending the access to a more patient-centered quantitative approach to rep imaging. As we enter the second half of the year, our focus is increasingly on translating this foundation into broader adoption. Let me start with our United States commercial strategy. In United States, we continue to strengthen the commercial structure needed to support our next phase of growth under the leadership of our Chief Commercial Officer, Satarjeet Mishra. We expanded our United States commercial organization with the appointment of Jason Dyer, our Vice President, Renal South East; and Dave Reinhart as Vice President, Regional Sales West. This expanded team strengthens our ability to engage directly with the imaging centers, clinicians and enterprise health systems while continuing to leverage our exclusive distribution partnership with Ali Imaging a subsidiary of Canon Medical Systems United States. By combining established distribution infrastructure with the expanded direct commercial and business development capabilities, we're building a scalable commercial model designed to deepen cost engagement, accelerate clinical adoption and installed base growth and support sustainable long-term revenue growth and margin expansion. Internationally, we continue to expand our commercial infrastructure through experienced regional partners with established market presence, local relationships and deep knowledge of their health care systems. Our distribution partnerships with Golf Medical in Saudi Arabia and Alnagi Medical United Arab Emirates. Together with our sales agent partnership, reinvent pharma in Pakistan provide a capital-efficient model for expanding our commercial reach and supporting local market development. This partner-led approach enables QT Imaging to leverage established sales and service infrastructure, willing the foundation for broader international adoption of best acoustic Citymodality. While geopolitical developments have impacted commercial activity in parts of the Gulf region, we are beginning to see encouraging signs of renewed customer engagement supported by our regulatory authorization and distributor partnerships. On the regulatory front, we continue to expand our international commercial function. We received clearance from the Saudi Food and Drug Authority SFDA for the QTI breast QTI's Breast Acoustic CT™ scanner is FDA-cleared as a supplemental screening device for breast imaging, including Quidiscanner, enabling us to market and sell our technology in Saudi Arabia. More recently, we received a MAR authorization from the Ministry of Health in Israel, enabling commercialization of the Breast acoustic discounter in the market. Together with our existing authorization in the United Emirates, these milestones further send our regulatory foundation across the Middle East and expand the market in which we can commercialize Breast cost platform. The first best ecusicity canter in this 1 is going to Randon Healthcare campus to support a planned clinical study in women with hereditary risk for breast cancer. This study provides an important opportunity to evaluate our radiation-free compression free quantitative imaging technology in a high-risk population, where longitudinal imaging is particularly important and to generate additional evidence supporting its potential role in personalized breast health management. During the quarter, we also strengthened our balance sheet to a $10 million underwritten public offering. In addition, we amended our senior secured term loan with Lindo Lake, extending the maturity date by 2 years. Together, these actions provide additional financial flexibility as we continue to execute our commercial, clinical and strategic initiatives. During the first half of this year, we secured 2 FDA clearances that expanded the capabilities of the Breast CD system, including an enhanced can configuration that improves posterior breast imaging coverage and software functionality supporting volumetric measurement for lesion doubling time assessment. These enhancements reinforced QT imaging strategy of continuously expanding the platform through innovation in both hardware and software. A critical milestone during the first half of the year was the American Medical Association approval of a dedicated category 3 CPT reimbursement code for our imaging modality. The call was released on July 1 and become effective January 1, 2027. It provides a standardized mechanism for reporting utilization tracking and data collection and importantly, create the framework to build a clinical and health economic evidence that can support future coverage decision. We continue to strengthen the clinical expertise supporting the adoption of the restack platform. Our Clinical Advisory Board includes leaders across breast imaging, breast surgery and clinical practice including Dr. Maria Machida of USC Keck School of Medicine; Dr. Barry Rodman and MD Anderson Train Surgical oncologists and breast surgeon, and Dr. George Pallinger, Mayo Clinic trained radiologists and early adopter of our imaging modality in his imaging center. Their complementary expertise is helping us strengthen physician education, clinical implementation and rider training as we support broader clinical adoption. Additionally, we announced results from a multisite study, evaluating the repeatability and reproducibility of quantitative measurement generated by the Breakout platform. The results demonstrated less than 1% variability in speed of sound measurements across canners under the study conditions. This level of consistency is important because quantitative imaging biomarkers must be reproducible across systems, locations and operators to reliably measure changes in breast tissue over time. We believe that these results reinforce the potential of our imaging platform to provide objective, reproducible quantitative information for longitudinal Breast Health Management and Precision Breast Care. As reported previously, Mayo Clinic conducted a prospective feasibility study evaluating CT scan in the supplemental imaging setting. The study reported breast level agreement between Qscan and MRI and the identification of CT scan of all lesions consider suspicion MRI. This pilot findings support the rationale for a second study involving more than 100 patients, which is expected to begin in the coming months. We are also advancing a prospective clinical study with Dr. Barry Rosman to evaluate the breakout technology in a diagnostic breast imaging pathway. This study will compare QD scan with established dress imaging modalities and were available pathology with the goal of generating real-world clinical evidence supporting the diagnostic performance and broader adoption of our technology. At Saybrook ongoing 100-patient clinical study is evaluating QT scan versus MRI and under our NIH contract, clinical work is evaluating advanced quantitative votes on findings in relation to treatment response in women receiving new adjuvant chemotherapy. Together, these programs are building complementary body of evidence across diagnostic performance, high-risk populations, quantitative reproducibility and treatment response monitoring, supporting our broader objective of establishing the Breast Eco CT, imaging modality is a clinically validated quantitatios breast imaging platforms. Innovation remains an important area of focus during the quarter. Softer version 4.50 improved the spatial resolution of breast acoustic reflection imaging, providing radiologists with greater detail and clear visualization of breast anatomy and tissue structures while maintaining processing time designed to support an efficient clinical workflow. Our collaboration with Ole Medical was focused during the quarter on productization of the QTR viewer as an advanced modality imaging solution for breast acoustic City platform. The viewer is being developed to provide physicians with an integrated environment for image visualization, correlation with other imaging modalities, quantitative assessment and longitudinal patient evaluation while supporting more efficient clinical workflows. In parallel, our collaboration with Intelerad provides the secure cloud and tax infrastructure supporting image management, clinical and research connectivity and enterprise deployment of QT imaging precision pathways. Building on this infrastructure, we continue to advance the QT precision pathway, cloud platform to support secure image management, clinical cooperation, quantitative analysis, software development and future AI-enabled applications. Our strategy is to build a platform that combines the best equity City scanner with softer and cloud-based capabilities to enhance the value of each system across the installed database. In July, we announced the successful completion of our first routine FDA inspection since the inception of the company with 0 Form FDA 483 observation. The inspector provided positive feedback regarding the organization of our quality management system and the responsiveness of our team. We believe this exceptional outcome reflects the quality culture we are building and the strength of the systems and processes supporting the mainstream and commercialization of our technology. During the quarter, we entered into an agreement to relocate our headquarters and manufacturing operations into a new 22,000 square foot facility in Pataluma, California. As reported previously, the new facility will provide more than 2.5x our current operational space while reducing the lease cost per square foot by approximately 55%. Put another way, we're more than doubling our real estate footprint at the comparable cost. This investment expands our manufacturing capacity, improved operating efficiency and provide the infrastructure needed to support future commercial growth. Strengthening our scientific leadership is an ongoing priority. We recently appointed Dr. Julia Albright, who is our Chief Science Officer. Julia brings more than 3 decades of leadership experience across medical imaging, health care technology, artificial intelligence and enterprise software. In her role, she is helping align our scientific strategy, product innovation engineering and clinical programs as we advance the QT imaging platform. Collectively, these achievements demonstrate that we are building the commercial, clinical, regulatory and operational foundations needed to support broader adoption of breath acoustic CT platform. As we look toward 2027, our focus is increasingly on accelerating adoption, expanding our installed base and leveraging the commercial infrastructure we are building today to support sustainable growth and margin expansion. At the same time, as we mentioned previously, our vision extends beyond the breast aucostic CT. We're building a quantitative breast imaging platform that brings together advanced hardware, software, cloud infrastructure and over time, quantitative biomarkers and AI-enabled clinical applications. We believe this platform has the potential to increase the value of our growing installed base, while providing physicians with objective reproducible information to support more personalized breast health management. And now I will turn the call over to our CFO, Jay Jennings, to review our financial results. Jay?

Thank you, Raluca, and good afternoon, everybody. Revenue for the second quarter of 2026 was $7.4 million, an increase of 103% compared with $3.7 million for the second quarter of 2025. The increase was primarily attributable to the shipment of 15 breast acoustic CT scanners in the 2026 quarter compared with 8 in the prior year quarter. Gross margin was 41% for the second quarter of 2026 and compared with 50% for the second quarter of 2025. The gross margin for the second quarter of 2026 was in line with our projections for sales in the United States. The higher prior year gross margin reflected a lower weighted average cost of inventory sold. Total operating expenses for the second quarter of 2026 were $4.9 million compared with $2.9 million a year ago, with the increase reflecting higher employee compensation and benefits, professional service costs and marketing expenses. Operating loss for the second quarter of 2026 was $1.9 million compared with an operating loss of $1.0 million for the second quarter of 2025 and $2.3 million for the first quarter of 2026. The net loss for the second quarter of 2026 was $11.1 million compared with a net loss of $4.0 million for the second quarter of 2025. The second quarter 2026 net loss included an $8.3 million noncash loss on debt extinguishment and modification associated with the amendment of our senior secured term loan with Ben Rock Lake. Accounts receivable was $7.4 million as of June 30, 2026, primarily from the shipment of 15 scanners during June 2026 compared to $5.8 million as of December 31, 2025, primarily from the shipment of 12 scanners during December 2025. The accounts receivable of $7.4 million was paid during the beginning of August 2026. Accordingly, as of August 7, 2026, cash and restricted cash totaled approximately $14.2 million compared with approximately $11.0 million as of June 30, 2026. Please see our Form 10-Q filed earlier today for further details regarding our second quarter and first half financial results. During the quarter, we amended our credit agreement with Lynrock Lake, extending the maturity date of the $10.1 million senior secured term loan by 2 years from March 31, 2027, to March 31, 2029. We and increasing the interest rate from 10% per annum to 12% per annum. Now turning to 2026 financial guidance. We are affirming our expectation for revenue of approximately $39 million for the year, more than double 2025 revenue. This guidance is based on the expected shipment of scanners under distributor minimum order quantities as well as expected contributions from our direct sales efforts. And now I'll turn the call back to Raluca.

Thank you, Jayk. As we look ahead, we believe QT imaging is entering an important next phase. We have demonstrated commercial growth, expanded our United States and international infrastructure, strengthen our clinical and regulatory foundation and continue to advance the cut imaging platform. Our priorities for the remainder of 2026 are clear: one, accelerate commercial adoption and installed base growth; two, strengthen our clinical and scientific evidence; three, expand global market access four, advance our quantitative imaging platform; and five, to continue scaling the business with operational discipline. We believe execution across these priorities position us well as we move towards 2027 and continue building the QT Imaging into a leading quantitative breast imaging company. Thank you for your interest. Thank you, imaging and for your continued support. With that, we are ready to take questions. Operator?

[Operator Instructions] Our first question comes from Jeffrey Cohen with Ladenburg Tallman.

We've got a few questions. So I guess, firstly, you did mention Pakistan at the beginning of the call. Could you bring us up to speed on what's going on there?

Jeff, thank you so much for joining the call. Great to hear you. So we do have a sales hedging agreement in Pakistan with a women-led company that's called reinvent. And we do have a few systems and they will hopefully go in the next few months towards that geography. FDA clearance is appropriate for Pakistan. So we do not need any additional regulatory clearance. But that is the plan.

Okay. Got it. And then could you talk about U.S. and the back half of the year? And commercial activity as well as your few commercial ads internally and how that may work domestically with QT as well as with NXT in the U.S.

Absolutely. So we are executing against our plan for shipments in the United States. So we shipped this quarter, 15 scanners, and we do plan to ship another 15 scanners and 7 teams respectively, from Q3 and Q4 in the United States, obviously, through a very strong partnership with NCC Imaging. We did move on, as we discussed last quarter, Jeff, with us starting to strengthen our direct sales team. we do see progress with our direct sales team selling into at least 2 segments, definitely imaging centers and hospitals. It is more of a solution sales, technical sales, clinical sale in those segments. Thus, we have brought in the 2 very experienced sales to cover the East Coast and the West Coast. We are not going to continue higher up until we get our feet on the ground and the sales managers start selling and growing the business in the United States. We do plan to have our direct sales taking on the responsibility in 2027 and ahead. Obviously, with the support from NXE and other distribution partners as they move into 2027. Is that answer you question?

Yes, perfect. A couple more, if I may. Cadence on back half placements for this year, would you expect a ramp through Q3 and Q4? Or would you expect them to be fairly even?

Jeff, I had a hard time hearing the beginning of your question. Could you please repeat?

Craft placements for the back half of the year, Q3 versus Q4, would you expect a gradual increase through the next quarters or have?

, no. We do expect an increase in the placement in Q3 and Q4, and our team will help an NXE team through that.

Got it. Okay. One for Jay, if I may, Jay. Back half OpEx, is that $5 million number going to be fairly flat for the second half of the year per quarter?

Yes. We anticipate it going up a little bit with the hiring of the sales team as well as shifting of some of the clinical studies, expenses from the first half of the year into the second half of the year.

Got it. Okay. And then lastly, Raluca, you mentioned Q2 versus MRI 100-patient study. Is that a new study? And what do you expect to derive from as far as some coding or reimbursement down the road?