Hyperfine, Inc. (HYPR) Q2 2026 Earnings Report, Transcript and Summary

Good afternoon, and welcome to Hyperfine's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the call over to Webb Campbell from Gilmartin Group for introductory disclosures.

Thank you for joining today's call. Earlier today, Hyperfine, Inc. released financial results for the quarter ended June 30, 2026. A copy of the press release is available on the company's website as well as sec.gov. Before we begin, I'd 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 include, without limitation, those related 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 the 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 second quarter was another strong quarter for Hyperfine as we continue to execute across our commercial, operational, and financial priorities. Second quarter revenue was $3.9 million, our second highest quarter ever, up approximately 45% year over year, bringing our first half revenue to $7.8 million. We sold 12 systems in the quarter, up 50% year over year, with a majority of placements coming from our next-generation system and a high percentage of international sales. We also delivered our 4th consecutive quarter of gross margin above 50% and improved our cash burn both year over year and sequentially. Mid last year, we launched our next-generation Swoop system powered by Optive AI and entered the neurology office market. We refer to this next-generation version of the Swoop system as Model 2. At the time of launch, we believed improvements in image quality, expanding clinical utility, a growing body of real-world evidence, and a broader, more diversified commercial strategy could unlock meaningful growth opportunities across hospitals, offices, and international markets. One year later, we have accumulated important proof points supporting that thesis. We have broadened adoption across sites of care, increased IDN engagement, entered new geographies, expanded our clinical evidence, strengthened our balance sheet, and improved the financial profile of the business. As a result, we are now more focused on translating this stronger foundation into broader commercial scale. With our strong execution in the first half of the year, we are reiterating our full year 2026 revenue and cash burn guidance and remain confident in our growth, margins, and long-term opportunities. Market demand remains healthy, and we are driving growth across our 3 verticals: hospitals, including our growing presence in health systems, neurology offices, and international markets. I will now walk through updates from each of these businesses in more detail. The hospital market remains our largest commercial vertical and an important source of clinical and commercial validation. Over the past year, the Swoop system has moved beyond niche use in critical care toward broader platform utility across critical care, emergency departments, and hospital-based clinics, with emerging use in neurological workflows and mobile deployment models. Hospital programs launched over the last few quarters with the Model 2 Swoop system have reported high utilization, increased scan volume, and meaningful clinical, workflow, and economic benefits. This broader utility and strong utilization matter because they support repeat deployments, deeper health system engagement, and enterprise-level adoption over time. We have made progress with large health systems and IDNs. In recent months, we have sold Model 2 systems to several new health systems, including an initial placement within one of the largest national IDNs in early July, while also expanding beyond the first site within other health systems during the second quarter. As hospitals enter their first full capital planning cycle since the Model 2 launch, our hospital pipeline is increasingly supported by clinical evidence, economic validation, and more strategic IDN-level conversations. Expansion into emergency departments has been a priority in 2026. PRIME data presented at the SAEM 2026 meeting provided compelling evidence to support the use of the Swoop system to triage patients in the ED. PRIME showed that portable MRI reduced the median order-to-scan start time in the ED from 7.76 hours for conventional MRI to 1.28 hours with portable MRI. Faster access to imaging can help hospitals reduce workflow bottlenecks, support more timely clinical decision-making, and integrate MRI more easily into ED workflows where conventional scanner availability can be constrained. These proof points and near-term catalysts give us increasing confidence in hospitals and IDNs as a durable growth engine supported by the success of initial programs, clinical evidence, and economic validation. We are seeing a different but complementary opportunity develop in neurology offices, where the Swoop system can bring imaging closer to patients and reduce friction in the care pathway. Our office market continues to develop into a distinct growth vertical supported by utilization, reference site development, patient preference, and ease of access to imaging. We have now placed the Swoop system in over a dozen offices since launch, supporting the office ecosystem value proposition. Office staff have been able to operate the system without an MR technologist, underscoring its ease of use. Several offices also report very high scan volume. Also, we continue to see increasing interest from adjacent use cases, including dementia screening applications, as well as from concierge and wellness practice models seeking convenient, closer-to-patient imaging. Our NEURO PMR data supports this opportunity with 92% blinded concordance with conventional MRI identifying pathology, rising to 98% with clinical history, and patients 4x more likely to choose portable MRI. Our planned expansion to add contrast to our labeling is expected to be an important catalyst for the office vertical by broadening clinical utility and supporting additional use cases with established reimbursement under dedicated contrast-related CPT codes. These proof points give us increasing confidence that the office market can, over time, become a meaningful second U.S. growth vertical supported by utilization, patient preference, ease of use, and planned contrast labeling expansion. Beyond our U.S. hospital and office opportunities, we're also beginning to build a stronger international foundation. Following CE and UKCA Mark approvals earlier in 2026, our Model 2 Swoop system is now commercially available in Europe and the U.K., and we sold the first 2 Model 2 systems in the quarter. We expect to advance the European rollout of the Model 2 system with our distribution partners in the second half of 2026. In France, inclusion of Model 2 in the UniHA procurement listing creates a more efficient purchasing pathway across French public hospitals. And in India, following CDSCO approval of Model 1 late last year, AIIMS New Delhi became our first India deployment, serving as a high-profile clinical reference site in the region. These milestones give us increasing confidence in international markets as an emerging growth vertical with regulatory approvals, initial sales, procurement access, and reference sites, creating a stronger foundation for broader execution. We are pleased with our diversified commercial profile and the progress made in each of the verticals. We continue to invest in product and software capabilities that can expand the Swoop system's clinical utility across existing and new sites of care. Looking ahead, software remains a key driver of the Swoop system as a continuously improving AI-enabled platform. We expect our next software release later this year, building on our cadence of frequent software-driven enhancements that improve image quality, clinical utility and speed, workflow and user experience. We're making good progress on a plan to extend labeling to include brain MRI with contrast. Enrollment in Contrast PMR is approximately 75% complete, and the study is progressing well. We continue to target an FDA submission by year-end 2026 to support an expansion of our labeling to include gadolinium-based contrast agents. In addition, we see early interest in neurosurgical workflows and mobile deployment models, both of which reinforce the broader platform potential of the Swoop system beyond traditional fixed-site imaging. In surgery, a newly formed advisory board and the operating room pilots are evaluating the potential for portable MRI to support immediate post-procedure assessment, while mobile models could extend access to brain imaging across distributed care settings where conventional MRI availability is limited. These initiatives reinforce our view of the Swoop system as a scalable, AI-enabled platform with increasing clinical utility and multiple future growth catalysts. With that, I will turn the call over to Brett to review our financial performance and guidance.

Thank you, Maria. I'll recap our financial results for the second quarter of 2026 before providing an update on our guidance. Revenue for the second quarter of 2026 was $3.9 million, compared to $2.7 million in the second quarter of 2025, representing an increase of $1.2 million, or approximately 45% year over year, and modestly above the first quarter of 2026. First half revenue was $7.8 million compared to $4.8 million in the prior year period, an increase of $3 million, or approximately 62%. In the second quarter, we sold 12 units compared to 8 units in the prior year period, an increase of 50%. In the first half, we sold 22 units compared to 14 units in the prior year period, an increase of approximately 57%. Gross profit for the second quarter of 2026 was $2 million, compared to $1.3 million in the second quarter of 2025. Gross margin was 50.7% compared to 49.3% in the prior year period, representing approximately 150 basis points of gross margin expansion. This is our 4th consecutive quarter with gross margin exceeding 50%, and we believe we are well positioned for meaningful margin expansion over time as we scale. R&D expenses for the second quarter of 2026 were $3.9 million compared to $4.5 million in the second quarter of 2025, a decrease of approximately 15%. We continue to realize the benefits of the reorganization completed in the first quarter of 2025, while focusing our R&D investment on the highest priority product and software initiatives that support commercial growth. Sales, general, and administrative expenses for the second quarter of 2026 were $6.6 million compared to $6.4 million in the second quarter of 2025, an increase of approximately 3%. We 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 the second quarter of 2026 was $9.3 million, equating to a net loss of $0.09 per share, compared to a net loss of $9.2 million, or $0.12 per share, in the second quarter of 2025. The second quarter of 2026 net loss included a $0.6 million non-cash loss from the change in fair value of warrant liabilities, with no meaningful comparable impact in the second quarter of 2025. Net cash burn excluding financing in the second quarter of 2026 was $7.9 million compared to $8.1 million in the second quarter of 2025, an improvement of $0.3 million or approximately 3%. First half net cash burn excluding financing was $16.6 million compared to $18.2 million in the prior year period, an improvement of $1.6 million or approximately 9%. We remain focused on reducing cash burn through disciplined spending and improved operating leverage in 2026. As of June 30, 2026, we had $43.5 million in cash and cash equivalents on our balance sheet, an increase of $2.7 million during the quarter. This increase reflected $10.6 million of net proceeds raised through our ATM program at an average price of $1.52 per share, strengthening our balance sheet and supporting our cash runway. With a stronger financial position, we remain focused on converting our commercial progress into sustained revenue growth, gross margin expansion, reduced cash burn, and improved operating leverage. As we continue to scale, quarterly revenue may be influenced by placement timing, customer purchasing cycles, and geographic and product mix. Over time, we will continue to measure our progress through install-based expansion, sustained revenue growth, gross margin expansion, and a more scalable commercial model. Now turning to guidance. We continue to expect full-year 2026 revenue of $20 million to $22 million, representing year-over-year growth at the midpoint of approximately 55%. Our confidence in the second half outlook is tied to identifiable drivers, including continued adoption of our Model 2 Swoop system, hospital and IDN conversion, health system capital planning cycles, office adoption and utilization, international launch execution, clinical and health economic evidence, and product catalysts. We continue to expect gross margin to be in the range of 50% to 55% for the year, supported by 4 consecutive quarters above 50%. The key drivers supporting this range are already visible in our results, including increasing scale, a strong value proposition, service revenue growth, and disciplined commercial execution. We continue to expect total cash burn to be in the range of $26 million to $28 million for the full year 2026, representing approximately a 10% year-over-year decline at the midpoint, inclusive of our debt service payments. Lastly, we continue to expect our cash runway to extend into 2028, supported by a strengthened balance sheet, improved cash burn, and a commercial plan built on identifiable growth drivers. The debt facility we entered into earlier this year also provides additional financial flexibility. This positions us to execute against our commercial growth plan while maintaining our disciplined approach to operating expenses and capital deployment. I will now turn the call back to Maria for closing comments.

Before we open the call for questions, I would like to leave you with a few key takeaways. First, Hyperfine's financials are stronger than it was a year ago, supported by revenue growth, sustained gross margins above 50%, lower cash burn, and a strengthened balance sheet. Second, the launch of the Model 2 system is gaining traction. Over the past year, we have expanded utility and grown adoption across hospitals, offices, and international markets, and strengthened clinical evidence. Third, we are seeing early validation of our enterprise health system strategy through increased IDN engagement and initial large system adoption. Fourth, the office market continues to develop into an attractive growth opportunity supported by utilization, evidence generation, and planned contrast labeling expansion. And finally, we have multiple catalysts ahead, including Model 2 international rollout execution, the next AI-enabled software release, Contrast PMR enrollment completion and FDA submission, and overall broader commercial expansion. I'm proud of what the team has accomplished over the past year, and we remain focused on disciplined execution as we enter the second half of 2026. Operator?

[Operator Instructions] Your first question comes from the line of Frank Takkinen with Lake Street Capital Markets. Your line is open.

This is Nelson Cox on for Frank. I wanted to start with guidance a little bit. In the past, you've talked about budgetary cycles for the IDN initiatives and the back half kind of lining up with that. So you have $7.8 million on the board in the first half, and then the guidance assumes around $12 million to $14 million in the second half. I guess when you built that, how much assumes second and third sites at completion, kind of those existing IDNs versus first placements at new ones? I guess, just trying to understand how much of the ramp is repeat, kind of add-on orders at existing IDNs versus completely new ones. Thanks.

Sure, Nelson. Thanks for the question. So there are several elements built into how we're looking at the second half over the first half, and definitely on the hospital side, there is subsequent placement in some of the IDNs in which we have opened. And across all hospitals, there is an effect of the budgetary sort of new year starting, the July sort of to June cycle, which wasn't available to us when we introduced Model 2 sort of at the midpoint of last year. But there's also the continued rollout of the office business, as well as other things that we're doing with the new software coming to the market in the second half, some of the pilots we're doing around neurosurgery and mobile. So I would say there are all of those layers that just keep adding to what we have built in the first half. The first half was a significant step-up, but we're expecting more of that in the second half. And I think overall we do have these identifiable catalysts. They're not just about the hospital business or just around the IDN.

Got it. Very helpful. And then maybe on the office business, as you've gotten a few more quarters of experience with practices of different sizes, maybe talk about how you're thinking about offering. Is there still going to be an offering for the Model 1 versus the Model 2, with maybe the Model 1 being more of a fit for smaller practitioner practices at maybe a lower price point, or how are you thinking about that?

So we've mentioned segmentation, and clearly the call point has segments, and they are very much based on the number of practitioners and with that the volume that they drive. We have seen that our initial adoption, I think we mentioned in the prepared remarks that we are in over a dozen offices since we launched, it has translated more into the larger offices that have greater volume, that have been able to support the Model 2 and are very excited about the capabilities of the Model 2 today and into the future. In the last year, we've done a few Model 1 placements, but I would expect that there will be more Model 2 in the offices that have the larger volume, and also the opportunity to have contrast in our indications for use in relatively short order will support additional cases in larger offices and the ability for those offices to use the dedicated CPT codes for contrast brain MRIs, which also pay higher. So all of that would create an economic picture for the office that probably will support more the Model 2 than the Model 1 going forward.

Very helpful. Congrats on the progress, guys. Thank you.

Thank you.

Your next question comes from the line of Yuan Zhi with B. Riley Securities. Your line is open.

This is Liwen Wang from B. Riley for Yuan Zhi. So for the 12 commercial systems during 2Q, do we have more color on the breakdown between hospitals, neurology office, and international placement? And do we see the neurology office channel become a meaningful contributor given it's been roughly a year since the next-generation Swoop launch?

Thanks for the question. This is Brett. I'll address the first part of that question in regards to the 12. What I'll comment on is just much like last quarter, we had a broad distribution from all of our verticals. So we had placements that came from international, the office, as well as the hospital. So we had placements that cut across all 3. One thing that we highlighted in the prepared remarks is the higher percentage of international mix for this quarter, but we did have a contribution that cut across all of them. The way we're thinking about each one of them is there's growth opportunities in each one of the segments. So we do see the office being a contributor to the growth in the second half of the year and beyond, given all the catalysts that Maria had mentioned.

I would now like to turn the call back over to Maria Sainz for closing remarks.

Well, thanks all for joining us today. We look forward to continuing to update you in future cycles. Thanks very much and have a great evening.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.