Key insights
- EDAP TMS reported strong revenue growth driven by its HIFU segment, beating expectations. However, EPS missed estimates, leading to a pre-market stock decline. Despite positive long-term stock performance, the market reacted negatively to the earnings miss and continued unprofitability, signaling caution among investors.
EDAP TMS reported its Q1 2026 earnings, showcasing a strong growth trajectory in its High-Intensity Focused Ultrasound (HIFU) segment. The company exceeded revenue expectations, reporting $17.8 million against a forecast of $14.77 million, a 25% year-over-year increase. However, its earnings per share (EPS) fell short, posting a loss of $0.2077 compared to an anticipated loss of $0.19. Despite the revenue beat, the pre-market stock reaction was negative, with shares dropping 4.68% to $3.46.
EDAP TMS demonstrated a notable growth in its core HIFU business, marking a significant inflection point in its commercial trajectory. The company reported a 25% increase in total revenue year-over-year, largely driven by the HIFU segment, which saw a 78% increase. This growth was fueled by increased sales of the Focal One system and higher treatment-driven recurring revenue. Despite the positive revenue growth, the company remains unprofitable, with a net loss of $9.1 million in Q1 2026.
EDAP TMS reported an EPS loss of $0.2077, missing the forecasted loss of $0.19 by 9.32%. However, the company exceeded revenue expectations, reporting $17.8 million compared to the forecast of $14.77 million, a 4.4% surprise. The revenue beat was significant, driven by the HIFU segment’s robust growth.
In pre-market trading, EDAP TMS’s stock fell by 4.68%, closing at $3.46. This decline came despite the positive revenue surprise, likely reflecting investor concerns over the EPS miss and ongoing net losses. The stock’s performance contrasts with its 52-week high of $5.05, indicating a cautious market sentiment.
The pre-market drop stands in stark contrast to the company’s longer-term performance, with shares delivering a 56% return over the past year and a remarkable 78% gain over the last six months. According to InvestingPro analysis, the stock currently trades above its Fair Value, suggesting investors should exercise caution at current levels. For those seeking better value opportunities, InvestingPro’s Most Undervalued stocks list offers compelling alternatives.
Looking forward, EDAP TMS continues to focus on expanding its HIFU segment, with plans to increase system sales and broaden clinical applications. The company anticipates continued revenue growth but faces challenges in achieving profitability. InvestingPro Tips highlight that the company is quickly burning through cash and analysts do not anticipate profitability this year. These are just 2 of 10 exclusive ProTips available to subscribers, alongside comprehensive Pro Research Reports that transform complex financial data into actionable intelligence for EDAP and 1,400+ other US equities. Future guidance suggests a focus on strategic investments to support this growth trajectory.
CEO Marc Oczachowski stated, "Our record revenue growth in the HIFU segment underscores the successful execution of our strategic focus on high-margin, high-growth areas." He emphasized the importance of the U.S. market and the company’s commitment to expanding its clinical applications.
Analysts questioned the company’s path to profitability, given the ongoing net losses. Executives highlighted strategic investments in growth areas and the potential for margin improvement as key factors in their plan to achieve profitability. Another focus was the expansion into new clinical indications, which could drive future revenue growth.
Conference Call Operator: Welcome to the EDAP TMS first quarter 2026 conference call. As a reminder, this conference call is being recorded. I would now like to turn the call over to Louisa Smith from Gilmartin Group. Please go ahead.
Louisa Smith, Investor Relations, Gilmartin Group: Good morning. Thank you for joining us for the EDAP TMS first quarter 2026 financial and operating results conference call. Joining me on today’s call are Ryan Rhodes, Chief Executive Officer, Ken Mobeck, Chief Financial Officer, and François Dietsch, Chief Accounting Officer. Before we begin, I would like to remind everyone that management’s remarks today may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations and involve risks and uncertainties that could cause actual results to differ materially from those anticipated. We direct you to the Risk Factors section of our most recently filed annual report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission, as well as our other filings with the SEC, for a description of factors that may cause such differences.
These statements speak only as of today’s date, and we undertake no obligation to update or revise them except as required by law. Additionally, this call is being recorded and constitutes a public disclosure for purposes of Regulation FD. I would now like to turn the call over to Chief Executive Officer, Ryan Rhodes.
Ryan Rhodes, Chief Executive Officer, EDAP TMS: Thank you, Louisa, and good morning, everyone. As announced this morning, we delivered a strong first quarter. We reported record first quarter total revenue for the company of $17.8 million, led by record first quarter Focal One robotic HIFU revenue of $11.6 million, further reinforcing the momentum we highlighted on our previous fourth quarter call. Today, I will provide additional color on new system placements, growing utilization trends, and our ongoing indication expansion efforts before turning the call over to Ken to review our financial results. Before discussing the quarter in more detail, I would like to remind everyone that effective January first of this year, EDAP becomes a U.S. domestic issuer. As a result, beginning this quarter, we will report all financial results in U.S. dollars on a go-forward basis. Now, turning to our first quarter results.
Our HIFU business continues to demonstrate strong and sustained momentum. We have now delivered seven consecutive quarters of year-over-year growth in the segment, reflecting increasing physician adoption, expanding utilization, and growing global demand for Focal One robotic HIFU technology. We delivered record revenue across our core HIFU business, driven by strong growth in both system placements and procedure volumes across U.S. and international markets. During the quarter, we recorded 11 capital sales and 10 total net placements, further reinforcing the strength in growing visibility of our Focal One pipeline. In the quarter, we continued to expand adoption across many of the most prestigious academic cancer centers in the United States. As noted, University of Pittsburgh Medical Center, UPMC, converted to a cash sale, and Moffitt Cancer Center became the 10th Focal One system installed in the state of Florida.
These placements further validate Focal One’s emergence as a leading robotic focal therapy platform being adopted and utilized by top-ranked institutions nationwide. We also placed a second Focal One system within the Mass General Brigham healthcare network. With this addition, 11 U.S. hospital and health networks have now invested in and launched two or more Focal One robotic HIFU programs, underscoring the growing utilization, confidence, and long-term commitment we are seeing from major healthcare systems. Internationally, we achieved a record six capital sales in the first quarter, reflecting the continued expansion of our global commercial reach, supported by our established and growing sales channel infrastructure. Performance in Europe was particularly strong. In France, we completed our first cash sale following the French National Health Insurance’s decision to provide universal coverage for the Focal One HIFU procedure.
As a reminder, this coverage decision was supported by results from the landmark HI-FI study, a large prospective comparative trial that demonstrated positive efficacy outcomes for Focal One robotic HIFU as compared with radical prostatectomy in the treatment of prostate cancer. This quarter also marked the first time our Focal One capital sales were driven by demand across 2 clinical indications: prostate cancer and deep infiltrating endometriosis. Further highlighting the value of Focal One as both a multi-specialty and multi-indication treatment platform. In the U.K., Cleveland Clinic London converted to a cash sale supported by strong engagement from global thought leaders in both urology and gynecology departments, which plan to utilize Focal One robotic HIFU for the treatment of both prostate cancer and endometriosis.
In Eastern Europe, we achieved our first Focal One cash sale in Hungary, driven by the hospital’s strategic initiative to expand treatment capabilities for both prostate cancer and endometriosis. These placements are important as they recognize Focal One robotic HIFU as the only multi-indication focal therapy platform to deliver broad clinical utility across both men’s and women’s health. In the Americas, we delivered our first Focal One system in Mexico, further expanding our growing clinical regional footprint, which now includes Brazil, Argentina, Chile, Panama, and Mexico. This is a result of our growing and expanding sales channel throughout this region. Turning to utilization, U.S. procedure volumes increased 53% year-over-year. This significant growth was driven by physicians and hospital systems that increasingly recognize the importance of offering Focal One as a cornerstone focal therapy treatment within a comprehensive prostate cancer program.
As we continue to expand the clinical applications of Focal One robotic HIFU and bring meaningful value to a broader population of prostate cancer patients, we also remain focused on the significant unmet need in patients who experience recurrence following failed radiation therapy. Radiation therapy failure rates reported in the clinical literature remain significant, and treatment options for these patients are