iRadimed Corp Aktie

Welcome to IRADIMED Corporation's First Quarter of 2026 Financial Results Conference Call. [Operator Instructions] This call is being recorded today, May 1, 2026, and contains time-sensitive accurate information that is valid only for today.

Earlier, IRADIMED released its financial results for the first quarter of 2026. A copy of this press release announcing the company's earnings is available under the heading News on their 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 with the meaning of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements focused on the 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 reports 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, operator, and good morning. Welcome to IRADIMED Q1 2026 earnings call. Sorry for a late start, we have a microphone problem. We withstand have a very rosy performance to announce with the first quarter 2026 revenue of $22 million, a 13% increase over the first quarter 2025. These results reflect solid execution across our product lines with strong revenue contribution of our MRI compatible IV infusion pump and our MR patient monitor noting that some revenue substantially drive from the [indiscernible]. There also continues to be growing revenue support for our ferromagnetic detection systems.

Our continued revenue growth, combined with disciplined expense management, including a modified commission structure, drove operating income up $7.2 million, a 33% improvement over the first quarter of 2025 with net income of $5.8 million or $0.45 per diluted share, a 22% increase over the prior year.

Next, I'd like to provide a brief recap of our expectations for the new 3870 MR IV pump. Recalling that in positioning this new product and its pricing, we have anticipated that the 3870 pump [indiscernible] would increase by some 10% to 14% over the historical 3860 pump ASP. However, they'll just beginning. Initial quoting and actual orders are showing a lift closer to 20% for the 3870 ASP.

Additionally, we are seeing that a majority of this new business is for Quad for pump systems rather than simply replacing the older 3860 Doble channel system. Thus, we are seeing both a higher per pop ASP and a larger group of customers purchasing twice as many pump channels, doubling the number of pump channels at a particular customer site.

Though obviously, our sales efforts are in the very stages. These 2 factors present a most exciting prospect for bookings and revenue as the year progresses. Opportunities for their 3870 pump system, as previously described, are both increased penetration on the greenfield which are predominantly those facilities that continue to deal with IV fluid delivery in the MR setting via various full school workarounds as well as the quite substantial replacement of imatinib aged installed base of 3860 pump systems.

The most immediate and significant increase coming from the large replacement opportunity. This replacement opportunity will be our key growth driver for the next several years. As that growth, as mentioned, has now begun to be in the driving factor in this second quarter. To provide some clarity to the revenue expectations in Q2 and beyond, it will not be a step change, but rather a controlled rank. which is initially controlled -- composed of declining revenue derived from the older 3860 pump system, domestic orders, which have trailed off as expected, offset positively by increasing revenue from the new 3870 system as we ramp up its production.

And Jim, our CFO, will provide our Q2 guidance for further quantifying how Q2 is expected to develop. To reiterate, source of the 3870 opportunity is given in our previous. For the U.S. market, there are approximately 6,400 5-plus year over 3860, 3861 pump channels up for replacement. We have been selling approximately 1,100 such 3860 channels annually. With the new 3870, we are targeting adding another 1,000 channels per year through replacement sales from the existing 6400 3860 units that are over 5 years old. As advertised, this starts in Q2 and continues through the rest of 2026 and beyond.

It is also important to understand that replacing only 1,000 channels per year, leaves many thousands more or be replaced in the years to come. For our domestic business on selling north of 2,000, 3870 pump channel [indiscernible] with the higher ASP currently being experienced. We expect to approach a $50 million annual revenue run rate [indiscernible] adding disposable maintenance, international sales, the MR monitoring business, prefer magnetic system, one can understand our confidence in achieving a 100-plus revenue run rate as 2026 progresses.

Timing has been discussed previously as well. But to recap that, we did not launch our sales effort for 3870 until late January. As advised, we targeted shipping 130 to 135, 3870 in Q2. Both the launch and the manufacturer of those initial 130, 135, 3870s are progressing as planned. As we issued in this morning's press release, the interest in the new 3870 has been gratified. The number of orders and dollar size, well ahead of our expectations this early in the product launch.

Given this great curve, still, however, Q2 revenue will not fully reflect this high level of exciting order activity as shipping even 135 new 3870 systems combined with the declining revenue of over 3860s keeps Q2 revenue somewhat in check. Again, it will be the back half of 2026 that was shy. As we continue to book more comps, at a higher ASP and fixing production of this 3870. I'll turn the call over to Jack Glenn, our CFO, to review the quarter's financial results and provide deeper color on growth through the balance of the year. 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 three months ended March 31, 2026, revenue was $22 million, up 13% from $19.5 million in the first quarter of 2025. IV Infusion Pump Systems contributed $7.7 million, up 28% year-over-year, reflecting the fulfillment of 3860 pump backlog from the beginning of the year. Patient bioclin Fonti systems contributed $7.1 million, up 9% year-over-year. Disposable revenue was $4.9 million, consistent with the prior year period, while ferromagnetic detection systems contributed $600,000.

Domestic sales accounted for 82% of total revenue, consistent with the first quarter of 2025. Gross profit for the quarter was $16.8 million with a gross margin of 77%, up from 76% in the first quarter of 2025. Total operating expenses for the quarter were $9.6 million, roughly in line with the first quarter of 2025. General and administrative expenses were $4.6 million. Sales and marketing were $4.1 million and research and development were $1.1 million. The increase in R&D was largely due to the end of capitalized internally developed software for the 3870 compared with Q1 of 2025 as well as new product development for the next-generation line.

Income from operations for the quarter was $7.2 million. Net income was $5.8 million or $0.45 per diluted share on GAAP basis, a 22% increase over the prior year period. Non-GAAP net income was $6.4 million or $0.49 per diluted share, up 17%. The effective tax rate for the quarter was approximately 25%. The increase in the effective tax rate for the quarter was largely due to the timing of deductions tied to the Windfall deduction for equity grants, which is a discrete item taken at the time of vesting of the equity brands, most of which will occur in the fourth quarter of this year. Therefore, we anticipate that the rate will trend down by the end of the year be more in line with previous years.

We ended the quarter with cash and cash equivalents of $56.4 million. Cash flows from operations was $8.3 million for the quarter compared to $4.3 million in the first quarter of 2025, an increase of 93%, reflecting higher net income and favorable working capital movements. Non-GAAP free cash flow was $7.6 million for the quarter after capital expenditures of approximately $500,000. Also today, the company's Board of Directors declared a regular quarterly cash dividend of $0.20 per share on outstanding common stock payable on May 29, 2026, to stockholders of record as of the close of business on May 15, 2026.

And lastly, for our financial guidance. For the second quarter of 2026, we expect revenue of $20 million to $21 million. GAAP diluted earnings per share of $0.40 to $0.44 and non-GAAP diluted earnings per share of $0.44 to $0.48. For the full year 2026, we reaffirm our guidance with a revenue of $91 million to $96 million, GAAP diluted earnings per share of $1.90 to $2.05 and non-GAAP diluted earnings per share of $2.06 to $2.21. The company expects stock-based comp exchange expense net of tax to be approximately $2.4 million for the full year and $600,000 for the second quarter of 2026.

With that, I will turn the call over to questions.

Operator?

[Operator Instructions]

Our first question comes from Frank Takkinen with Lake Street Capital Markets.

.

And congrats on all the solid progress. I was hoping to start with a follow-up on Roger, your comments related to quad system ordering. How do you -- maybe break that down a little bit why you think folks are going from a single dual channel to ordering for individual channels. And then my assumption is you can't assume everybody goes to ordering 4 channels. But is there something specific to call out with some of these early customers that would be more likely to order 4 systems? Or is it fair to assume that a lot of your customers reordering could fall into this camp of ordering quad system channel?.

Yes, good question, Frank. Well, yes, that's a good question. So it's a bit of a surprise that sold -- yes, more than half of these orders have been taken so far and in that is quad system, so that's a bit surprising. We were hoping for maybe 10% and 15% customers, we could step up to this doubling the number of channels they operate. So why? Your question, I guess, is why they have it? So I have to say that I'm going to give the sales force a little credit for this by and large. They are close to the customers. And they felt that with the new system, the way it works and the way the impression on me customers well, it's smaller than the old pump. And the way they actually step together on a poll that they really work together as 4 very easy.

And so we're showing it that way. We show -- we walk in and we're showing the Quad stack. And when customers see it, though they, of course, I've been thinking in terms of that before because they only had 2 channel [indiscernible] before. It does seem that it's fairly -- is fairly quick that, as I said, more than happy these pretty suggesting customers fairly quickly see that oh, wow, we've had -- we've had some cases come up over the years to give us in the older and pump where, yes, we needed a third and a fourth channel handy.

And this sort of stimulates this conversation to make customers think of those situations where they consider they needed that many channels. And they put the budget through and and another very positive sign has been -- these orders get -- we really started [ slowing ] in late January, as I pointed out. So orders that we're getting in at this point have been rather quick -- quicker than the typical cycle time for any more so far. So it's all very positive. But I think that's generally the reason if you picked it out that customers do have experience where after channels were required in the past, and there they go on it and taking advantage quad staff.

That's great. And then maybe just one follow-up on that. Is there a financial element to it as well? Are they getting a better per pump deal if they're buying 4 at a time....

No. That's not the -- pump is, as I said, was high. the net price of the previous pump was 20,000. So let's [indiscernible], right? So the greater spot was 20,000. You can buy the second channel providing to 10. So as we've told many times, our typical ASP pump deal -- it's just under 4 by the time you get the [indiscernible] and all that and the remote and all that. That's where it was landing. So the quad system we've been selling again quad staff, again, 3870 the IV pole remote control, these are coming in at more than 100,000. So it's very exciting.

Well, that's great. Maybe a bigger picture question. The concept that you laid out from going from around 1,000. I think you said 1,100 pumps a year to adding another incremental 1,000 on top of that. What are the drivers to that? I assume this concept, we just talked about the quad pump ordering is a significant driver, too. But is there an assumption of greenfield capture in that number as well? Or is it really just replacement?

No. No. What I was speaking about that earlier in the call, I'm just talking taking 1,000 out of the installed base where the old pumps are refill would be extra. And frankly, maybe I probably more clear, but frankly, the excitement well and the customers -- existing customers calling us [indiscernible] see the new pump is it kind of a fancy right now. I don't see that we're going to have time to start calling on the greenfield for a while. So no, that doesn't have any upside from greenfield factored in at this point.

That's great. And then just last one for me, and I appreciate all the time on manufacturing. How are you feeling from that standpoint? I think in our previous conversations, you felt really good about that. But as you're taking orders now and scaling that, how is all that going?

Well, sales team wants us to ramp it up a lot faster. But we're trying to take it a bit cautiously and ramp it up here, that's why I'm talking about 130, 135 pumps for this quarter. The sales team would like us to ship over 200, but we just can't do it. We're going to stay at that low. We're going to get them right. And then third quarter, we'll plan to near double that up again over -- in the next quarter, maybe a little bit more in third quarter. and so on in the fourth quarter, where we should be by fourth quarter is a pretty heavy stride on the number of the new pumps that we're kicking out of here.

And of course, having this new facility, we got the space and, yes, it's a matter of ramping up to [indiscernible] and stabilizing the supply chain. And so that's why we've been a little conservative on the ramp.

[Operator Instructions]

I'm showing no further questions at this time. I'd like to turn the call back over to Roger Susi for closing remarks.

Well, thank you all once again for joining us on today's call. I'd like to add as we close the call today, that the market is very excited about the new 3870 pump system, and we are being invited into customer facilities to show the device at a very high rate and the sales team is rather than on date.

Further, we have had bookings with greater-than-expected ASP as well as if the majority of those were thus far are for double the number of pump channels. So it's clear to us that the 3870 is having a great acceptance, generates great excitement and motivated very positive and rather quick customer response. So we're quite pleased.

And with that, I look forward to demonstrating rather success, as we further execute the launch of the exciting 3870 MRI up system and capitalize on the huge replacement opportunity throughout 2026 and beyond. Thank you.

Thank you. This concludes the call. You may now disconnect.

Welcome to the IRADIMED CORPORATION Fourth Quarter 2025 Financial Results Conference Call. [Operator Instructions]

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 reports 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 the 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 bioscience 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 3870 pump deal ASP will increase 10% to 14%. And yes, the 3870 design is much -- 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 [ urge ] for only a portion of pumps in that age group, but that portion resulted in significant revenue growth from pump sales in 2025. That being the old one.

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, 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 2,038 70 pump channels annually, with the higher anticipated ASP, 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 make sure that 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 this 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 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, is $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, $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. Operator?

[Operator Instructions] One moment for our first question. It comes from the line of Frank Takkinen with Lake Street Capital Markets.

Congrats on a solid finish to the year. Roger, I was hoping I could start with just some anecdotal thoughts around the initial market feedback from the pilot in the year. What can you tell us? What has the feedback been? And how has this influenced your decision to scale the 3870 launch in the second quarter here -- or first and second quarter here?

Good question. Frank, good to talk to you. So while it's been very positive, so maybe I should give a little more color. We've been showing the pump to more people than just that first taker of the 23 pumps. We actually have orders that we have on the books already, maybe, I don't know, another 15 or 20 pumps that are on order already. So we just launched this to our sales force a week before last, I believe it was. And so up until that time, we had some maybe 3 or 4 specialists in our sales team during November and December even showing the product to some select customers. So the feedback has been pretty tremendous.

To go specifically to our, lack of a better word, let's call it beta site. It's not really a beta site, but the first user, they have approved FDA products, so it's not really a beta. But we shipped it to them and then hold off keeping these existing orders that we have already booked, and as I said, holding off launching it to the greater sales team until 2 weeks ago, to learn from that. So that's a user who's been using our 3860, the older pump, for a long while. And I guess, I mean, they're pretty excited with the changes in the new pump.

The people we've showed it to, that are familiar with using the old pump are pretty excited about the new pump, I guess, it's simple enough to say. I had one of our -- an anesthesiologist was just in here last week from one of our long time large users up in the Boston area, and she's very familiar with using the pump daily in the MRI environment. Very excited, very excited about the changes.

So the product's products really sexy. It's very -- it just presses the button. It's quite modernized, right? The old pump was -- the genesis of that design is almost 20 years old. So this represents a big, bold new step. And lots of folks are excited. We're really thinking that demand will be great. And so we just wanted to do this a couple of months test with this one first single large user and make sure we have everything polished up just right because it's going to hit hard once it starts to ship.

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 running 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 in 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 -- what we're looking for is the higher ASP as well, that we would 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. And then last one, at the risk of getting over our skis, what's next for the R&D team now that the 3870 is launched and beginning to scale? Is there -- what's the R&D team up to next? And how should we think about that effort?

No respite, huh, Frank? Well, actually, we've been -- we've already started a few months ago working on the facelift, let's call, our next-generation MRI monitors. So the monitor we have now, we launched about, what, 7 years ago. So we plan to have a new updated monitor on the market in 2028. So we've been working on that a good 6 months already. And that's the next thing on the road map.

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 the primary drivers that the growth rate looked outsized compared to in the recent past?

Yes, sure. I can touch on that a little bit. I think on a disposable basis, we've kind of already said that we would think that the growth will be kind of commensurate with the capital side of things, hopefully, right? And so that kind of is reflected in that.

The one thing I would point out going forward is we believe that we can hopefully increase that utilization with the 3870. And a lot of that is based on is what we've talked about the user interface and so forth. And so hopefully, we can continue to grow it like that, but maybe even a little bit higher as we -- as time goes on 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 through Q2? Just wanted to check in on how levels look there.

Yes. I mean from an inventory standpoint, we're managing that 3860 as best we can, right? We don't want to have too much that we mixed the transition over, but we want to make sure that we can fulfill that backlog as we move forward. So we're monitoring that very closely. I think we're in pretty good shape there. But yes, going forward, certainly -- and we're bringing in that 3870 inventory, and that's reflected in the inventory numbers you see in Q4 as the increase in inventory as we brought in quite a bit of that 3870 in anticipation of the shipments. But certainly, it's going to be -- the challenge will be as we manage that transition over from the 3860 to 3870, and a lot of that will be 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 if the product is ready to go for the full launch?

We anticipate -- I mean that's why we did this like preview launch, is to get -- real users in the [ tranches ] feedback and make final tweaks. So we are. We've been making some tweaks here and there and making it just optimal for these -- our target user. That's the point of 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. That will be -- CE Mark in the end of the year. So yes, we're working on Japan, but Japan also takes some time. Probably won't be cleared in Japan until next summer time.

Okay.

Not this summer. The following summer.

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.

Welcome to the IRADIMED CORPORATION Third Quarter 2025 Financial Results Conference Call. [Operator Instructions] This call is being recorded today, November 3, 2025, and contains time-sensitive accurate information that is valid only for today.

IRADIMED released its financial results for the third quarter of 2025. A copy of this press release announcing the company's earnings is available under the heading News on their 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 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 that may include the company's expected future results. IRADIMED reminds you that future results may differ materially from those 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 in 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 now like to turn the call over to Roger Susi, President and Chief Executive Officer of IRADIMED Corporation. Mr. Susi?

Thank you, operator. Good morning, and thank you all for joining us on today's call. I am indeed very proud to report that IRADIMED achieved its 17th consecutive quarter of record revenue with the recent third quarter surpassing the 2024 third quarter by 16%.

In the third quarter of 2025, we achieved revenue of $21.2 million. Our gross profit came in at 78% and earnings remained strong with GAAP diluted earnings per share increasing 8% from Q3 of '24. Pump shipments again led performance in the quarter as our 3860 MRI IV pump grew another 20% year-over-year in Q3. Our MR monitor sales have also continued to impress. I am also pleased to report that shipments of our MRI patient monitor grew by 16%, clearly showing that our emphasis on monitoring sales for 2025 is proving successful.

Next, I want to touch on the planned rollout and commercial launch of the new 3870 MRI IV pump system, which was cleared in Q2. Let's recap what I have been saying about the #1 growth driver for the new 3870 pump. But first, yes, we anticipate a price increase of 10% to 14%. And yes, the 3870 design is such that we fully expect to penetrate the greenfield opportunity more effectively and also drive increased utilization among some of the existing customers who only use their older pumps rather sporadically. But most significant increases come from the large replacement opportunity, which is the #1 driver we see step changing the pump revenue and will continue to be our key growth driver in pump area for several years to come.

It is very telling that even the old 3860 model delivered 20% growth in the third quarter. This is driven mainly by limiting, again, our extended maintenance offering to pumps under 7 years old -- to 2 pumps rather under 7 years old, which has brought in replacement orders for about 1/3 of the pumps in that 7 and up age group. With the new state-of-the-art 3870 pump having 20 years of technological advancement over the aging 3860, we anticipate a significant demand to replace the very large pool of older 3860 model pumps starting now at the 5-year and older level.

Consider that in the U.S. market alone, there are approximately 6,300 5-plus year old or older 3860, [ 61 ] pump channels up for replacement. And we currently sell approximately 1,000 such channels annually in the domestic market. We will target adding another 1,000 channels per year in sales through replacement sales out of that existing 6,300 units that are over 5 years -- that are over 5 years old. This will be our target starting in Q2 and throughout the rest of 2026.

And as you can see, replacing 1,000 channels per year leaves many thousands more to replace in the years to come. To put numbers to this opportunity for our domestic business only, selling north of 2,000 3870 pump channels annually at a slightly higher anticipated ASP, we would be approaching nearly a $50 million revenue run rate for pumps. Adding disposables and maintenance, international sales and the MR monitoring business, one can understand our confidence in breaking into the $100-plus million revenue range.

I'd like to provide our thoughts as to timing on the rollout of the 3870. In December, we will deliver an initial order of 23 3870 systems, for which we will provide an extraordinarily level -- extraordinary high level of clinical support and monitoring of the use of the pumps through January and February to review and adjust planning based on user input. The full sales team rollout in the U.S. will begin after the national sales meeting in the third week of January.

Given the time required for our hospital customers to be sold, approve funding and issue orders, we expect bookings to build beginning in Q2 and ramp significantly in the second half of the year. We expect to maintain quarterly revenue in the first half of 2026 through the increasing MRI monitoring business and our 3860 pump backlog.

Now let's discuss our updated financial guidance. For the fourth quarter of 2025, we expect revenue now of $21.4 million to $22.4 million and anticipate GAAP diluted earnings per share of $0.43 to $0.47 and non-GAAP diluted EPS of $0.47 to $0.50. For the full year 2025, we are raising our guidance to $82.5 million to $83.5 million, up from our prior range of $80 million to $82.5 million.

GAAP diluted earnings per share is now expected to be $1.68 to $1.72, up from $1.60 to $1.70. And non-GAAP diluted earnings per share is expected is $1.84 to $1.88, up from $1.76 to $1.86. We also remain committed to delivering value through our $0.17 per share quarterly dividend declared for Q4 and payable on November 25.

I'll turn over the call to Jack Glenn, our CFO, now, to review the quarter's financial results. Jack?

Thank you, Roger, and 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 GAAP measure on the last page of today's release.

For the 3 months ended September 30, 2025, we reported revenue of $21.2 million, a 16% increase from $18.3 million in the third quarter of 2024. This growth was driven by strong performance across our product lines with MRI compatible IV infusion pump systems contributing $8.3 million, up 20% year-over-year and patient vital signs monitoring systems contributing $6.9 million, up 16%. Disposable revenue grew 12% to $4.1 million, reflecting increased utilization of our devices, while ferromagnetic detection systems also saw solid gains.

Domestic sales increased 19% to $18.1 million and international sales remained consistent at $3.1 million. Overall, domestic revenue accounted for 85% of total revenue for Q3 2025 compared to 83% for Q3 2024.

Gross profit was $16.4 million, up 16% from $14.1 million in Q3 2024, with a gross margin of 78% compared to 77% in Q3 of 2024. The strong margin performance was especially noteworthy as we moved manufacturing operations into the new facility at the beginning of the quarter and stayed on track with our shipment and cost of goods sold targets.

Operating expenses for the quarter were $9.7 million, up 15% from $8.4 million in Q3 of 2024, driven by higher sales and marketing expenses to support our growth and modest increases in general and administrative costs and research and development expenses. The increase in sales and marketing expenses was primarily due to higher sales commissions for our direct sales force in the U.S. as they exceeded their bookings plan in the quarter.

Income from operations grew 17% to $6.8 million from $5.8 million in Q3 of 2024. Tax expense for the quarter was $1.7 million, resulting in an effective tax rate of 23.6%. The increase in the effective tax rate was primarily due to a catch-up in the quarter with our projected effective tax rate for the year now estimated at 22%.

Net income was $5.6 million or $0.43 per diluted share, a 12% increase from $5 million or $0.40 per diluted share in Q3 of 2024. On a non-GAAP basis, net income was $6.1 million or $0.47 per diluted share, up 9% from $0.43, excluding $0.5 million of stock-based compensation expense net of tax.

Now turning to our balance sheet. We ended the quarter with cash and cash equivalents of $56.5 million, up from $52.2 million at year-end 2024. Cash flow from operations was a strong $7 million for the quarter and $19 million year-to-date. Free cash flow, on non-GAAP measure, was $5.7 million for the quarter and $11 million year-to-date, reflecting capital expenditures of $8 million year-to-date, primarily related to the new facility. Final payments totaling approximately $1.3 million for the facility were made in the third quarter, bringing the total construction cost to approximately $13.3 million.

And with that, I will now turn the call over for questions. Operator?

[Operator Instructions] Our first question is going to come from the line of Frank Takkinen with Lake Street Capital Markets.

Congrats on the solid quarter and all the progress. I was hoping we could start with some more color around the kind of bridge to $50 million run rate in pumps. I appreciate the timing you laid out related to sales meeting, launching after that in January and then ramping the backlog in Q2 through mid-2026. When should we expect that to flow through to kind of revenue to that $50 million run rate? Can we see that in late '26? Or is that more of a 2027 event?

We should -- yes, Frank, it's Roger. Maybe I'll pick it up first and let Jack jump in if he has some more color for you. As I said, most of that -- given that we start pounding the pavement shall we say, to sell 3870 here in me mid-January, the early part. But by the time they get out there, you're basically half of Q1. And as I mentioned, orders don't just immediately get turned around even from people that are -- we think are pretty well pent up with desire to get a new pump now after at least 20 years of 3860.

So yes, the story is in the back half of 2026 for revenue. We anticipate bookings and so forth, that we'll be able to report on in the first half, certainly. But the real revenue will start to ramp up in the third and fourth quarter. And so yes, by that fourth quarter, we think it will be pretty clear that we're doubling the number of pump channels that we're booking certainly and the revenues should start to reflect that as well.

Got it. That's helpful. And then I wanted to follow up on one comment in the press release. I think it was along the lines of despite some inefficiencies with the transition, we maintained a 78% gross margin. Quite honestly, I figured that would be followed with our gross margin was negatively impacted and below expectations, but that was still above expectations. Is it may be kind of hinting at the fact that you can get even better gross margins out of this product potentially into the 80%? Or how should we kind of read through on that inefficiencies and how that impacted the quarter?

Well, I think it shows that we did a great job. transition, moving the entire operation across Orlando essentially and getting it plugged in and running again, that we didn't have any glitch negatively impacting revenues and subsequently cost of goods. And -- but I think the real impact there is that the revenue -- the stuff that we didn't ship out by and large, in Q3 was heavily domestic. And so that is probably what accounts for that 1% boost in the gross margin. So can it be sustained? Well, as we get quarters where domestic business is a little bit on the lesser side from international business, that will fluctuate probably by that point.

Our next question comes from the line of Kyle Bauser with ROTH Capital Partners.

Congrats on the great results. Maybe we can talk a little bit about inventory levels for 3860 and 3870. Maybe first on 3860. Obviously, demand is still very strong here. It doesn't sound like any air pockets, which is impressive. Is pricing stable on that? Or are you planning on maybe sort of providing any sort of discounted levels there as you kind of roll out that inventory and move into 3870?

Kyle, nice to have you on board here with us. By the way, and hope to meet face-to-face soon. But to answer your question, the question is simple, no. No. We haven't -- it's surprising maybe, but yes, that boost -- that gift that keeps on giving from these old 3860 pump orders is straight at the ASPs we've always enjoyed, no discounting, no, haven't done that.

Great. Great to hear. And maybe on -- how are you thinking about inventory levels for 3870 ahead of the launch? And what are current levels? Or do you expect -- how do you expect to manage that, et cetera?

Well, there's lots of money going there. I'll let Jack pick that one up.

Sure. So good to hear from you, Kyle. So yes, as far as the inventory levels of 3860, certainly, we have the inventories and we'll plan the inventories for the backlog that we have currently with the 3860, which will be shipping throughout Q1 of next year and end of Q2, it looks like.

As far as the 3870, we are beginning those buys now. And so you'll see in Q4, there certainly -- we're building up inventory for those 3870s and now will be appropriate build for Q1 and beyond. And so certainly, we have the working capital from that perspective, no issues there.

Okay. Appreciate that. And I don't want to get ahead of myself here since you're just kind of beginning the rollout into the U.S. But can you remind me plans eventually to secure entry into international markets for 3870 and how you're kind of thinking about that?

Yes. It's primarily a regulatory issue. There's the new MDR requirements to maintain your CE Mark for European community business. That's a heavy lift, but our regulatory folks, they came off of a long battle with FDA, as you know, to clear the 3870, but that was back in May. They took a breather, but they're hot and heavy on obtaining that MDR, let's call it a clearance, but it's a registration where the CE Mark. And that will -- that's what we're targeting to be done in Q4. So international business will switch over to the 3870 next year, 2027, I should say, not in 2026. We'll just be getting the MDR towards the latter part of 2026.

Likewise, our other large market for pumps is Japan. And I'll be speaking with them. I'm in Japan calling on this call right now. I'm speaking to them here in the next day or 2 and working with the Japanese to clear the product here in Japan. We're going to do that simultaneously. But it probably still will be somewhere in the fourth quarter by the time we get that cleared. And then we'll switch Japan over. So both those largest international markets will be a 2027 kicked in.

Okay. Great. Appreciate that. And maybe just one more quick one. Glad to hear you're fully moved into the new facility. I think it's 2.5x the size of the previous facility. Correct me if I'm wrong. But any sense as to kind of what level of sales this could support or capacity, however you want to frame it?

Well, it is 2.5x the size. That's right. And we were doing $20 million a quarter out of that 2.5x smaller space. So the math of it's pretty equal. We don't see any reason why we can't get to $50 million a quarter in the new facility. And so yes, 2.5x. But unlike the old facility, we're not landlocked where we are.

As you might recall, Jack mentioned the cost of construction of the building that we did pay cash and we built it with our cash flow. But we also purchased the 26 acres. The building sits on about 5 of it, 5 or 6 of that. So there's lots of space around us that's ours to -- and the way we constructed the building was so it could easily be expanded into that adjacent space that we own.

So we have plenty of space without spending another nickel on any construction or buying more land. And to expand the production side of the building into the land that we already own is not that heavy of a lift. So we have, I guess, paid forward quite a ways these plenty capacity physically.

Thank you. And this will conclude today's question-and-answer session. And I would now like to turn the conference back over to Roger Susi for closing remarks.

Thank you, operator, and I thank you all once again for joining today's call and look forward to displaying IRADIMED's ability to execute once again as we introduce our new MRI IV pump and capitalize on the huge replacement opportunity throughout 2026 and beyond. Thank you.

Thank you. This concludes the call. You may now disconnect. Everyone, have a great day.

Welcome to the IRADIMED CORPORATION Second Quarter of 2025 Financial Results Conference Call. [Operator Instructions] This call is being recorded today, August 1, 2025, and contains time-sensitive accurate information only today.

Earlier, IRADIMED released its financial results for the second quarter of 2025. A copy of this press release announcing the company's earnings is available under the heading News on their 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 over the Internet on the company's website at iradimed.com, and a replay will be available on the website 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 reports filed with the Securities and Exchange Commission, which may be obtained free from the SEC's website at sec.gov.

I would now like to turn the call over to Roger Susi, President and Chief Executive Officer of IRADIMED CORPORATION. Mr. Susi?

Thank you, operator. Good morning, and thank you all for joining us on today's call. I am indeed very pleased to report yet another record quarter, marking our 16th consecutive quarter of record revenues.

For the second quarter of 2025, we achieved revenue of $20.4 million, a 14% increase over the same period last year. Gross profit came in at 78%, with earnings very strong as well. GAAP diluted earnings per share increasing 18% from Q2 of 2024.

Pump shipments led performance in the quarter as our 3860 MRI IV pump continued to excel in Q2. In addition to the great pump performance, I am also very happy to report that shipments of our MRI patient monitor grew 9% and that bookings in Q2 indicate that our emphasis on monitoring sales for 2025 can be expected to achieve our plans with this product line as well.

I'd like to quickly follow up on comments regarding tariffs and DOGE impacts, which we had discussed at some length during our earnings call of Q1. We can now look back and see that though tariffs have been collected on some of the components we utilized, the actual impact is still very small. We do feel, however, that as tariffs become stable and finalized, especially Chinese tariffs and as pre-tariff inventories dwindle here within our stocks, we will have a better idea of the measurable tariff impacts to manage and report upon in the future.

As for DOGE effects upon various agencies and possible issues secondarily affecting IRADIMED, such impacts did not materialize. In fact, as announced on May 22, the FDA cleared our new 3870 IV pump systems for distribution. With this long awaited and hard-fought FDA action, the road ahead for IRADIMED is clear and wide. Since the founding of IRADIMED 20 years ago, this clearance and the sales growth that the new pump will ignite will prove to be a seminal event.

Reflecting a moment, when I founded IRADIMED, frankly, though we had a strong vision that an MRI IV pump would be a highly successful niche device, my revenue targets from then now appear overly modest, being in the double digits. Now that revenue vision looks to be passing the $100 million revenue run rate, as we progress through 2026. I could not be prouder of what we have done with this fascinating MRI niche.

Let me share how we envision these next several quarters. Most of you have seen the effect on the sales of our existing legacy pump, the original design core from 20 years ago, when we simply discontinued offering service contracts for units 7 years and older. This action led a number of customers to replace older 3860 pumps with newer, newly manufactured 3860 pumps. But now that we have a new state-of-the-art pump with 20 years of technological advancement, we anticipate a huge demand for replacing older 3860 model pumps starting at the 5-year-old level.

For context, in the U.S. market alone, there are over 6,200 5-plus-year-old 3860, 61 pump channels up for replacement. We currently sell approximately 1,000 such channels annually into the domestic market. We will target adding to that base of 1,000 channels per year another 1,000 channels through update replacement sales from that 6,200 units that are over 5 years old. This will be our target in 2026.

In subsequent years, we expect to increase the drawdown of old pump channels from 1,000 to over 2,000 and growing and so on. Again, adding the increased sales for replacements into the current base run rate of 1,000 a year, and you can understand why I see piercing that $100 million revenue run rate in 2026 and continuing strong growth for years afterwards.

To put numbers on this, for our domestic opportunity only, as we sell 2,000 3870 pump channels annually, with a slightly higher ASP we anticipate, the 2025 domestic pump device revenue currently expected at $28 million in 2025 will become nearly $50 million, adding in disposables, then international sales plus the MRI monitor business, and one can understand my confidence in breaking through this $100 million revenue range.

Now let's discuss our updated financial guidance. For the third quarter of 2025, we expect revenue of $20.5 million to $20.9 million, representing 12% to 14% growth over Q3 2024, which was $18.3 million. We anticipate GAAP diluted earnings per share of $0.41 to $0.45, and non-GAAP diluted earnings per share of $0.45 to $0.49, reflecting a 10% to 12% growth over Q3 2024's $0.40 to $0.43, respectively, tempered by anticipated, but short-lived operational inefficiencies during our facility transition, which we've just moved into our new building.

For the full year 2025, we are raising our guidance to reflect our strong first half performance. We now expect revenues of $80 million to $82.5 million, up from our prior range of $78 million to $82 million, representing 9% to 13% growth over 2024's $73.2 million revenues. GAAP diluted earnings per share now expected to be $1.60 to $1.70, up from $1.55 to $1.65, and non-GAAP diluted earnings per share is $1.76 to $1.86, up from $1.71 to $1.81. These ranges account for approximately $2.6 million in stock-related compensation expense, net of tax for the full year and $0.6 million for Q3. We also remain committed to delivering value through our $0.17 per share quarterly dividend declared for Q3 and payable on August 28, 2025.

Now, I'll turn the call over to Jack Glenn, our CFO, to review the quarter's financial results in detail.

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 operating measures in this morning's earnings release and a reconciliation of these non-GAAP measures to the GAAP measure on the last page of today's release.

For the 3 months ended June 30, 2025, we reported revenue of $20.4 million, a 14% increase from $17.9 million in the second quarter of 2024. This growth was driven by strong performance across all product lines with MRI compatible IV infusion pump systems contributing $8.2 million, up 19% year-over-year and patient vital signs monitoring systems contributing $5.9 million, up 9%.

Disposables' revenue grew 14% to $4.2 million, reflecting increased utilization of our devices while Ferromagnetic Detection Systems and Services revenue also saw a solid gain. Domestic sales increased 18% to $18.2 million, and international sales decreased 9% to $2.2 million.

Overall, domestic revenue accounted for 89% of total revenue for Q2 2025 compared to 86% for Q2 2024. Gross profit was $16 million, up 14% from $14 million in Q2 of 2024 with a gross margin of 78%, consistent with the prior year. The strong margin performance was supported by increased overhead absorption, as we built inventory ahead of the new facility's opening.

Operating expenses for the quarter were $9.2 million, up 9% from $8.4 million in Q2 of 2024, driven by higher sales and marketing expenses to support our growth and modest increases in general and administrative costs. Research and development expenses remained steady at approximately $0.9 million. Income from operations grew 21% to $6.8 million from $5.6 million in Q2 2024.

Tax expense for the quarter was $1.6 million, resulting in an effective tax rate of 21.2%. Net income was $5.8 million or $0.45 per diluted share, an 18% increase from $4.9 million or $0.38 per diluted share in Q2 of 2024. On a non-GAAP basis, net income was $6.4 million or $0.49 per diluted share, up 17% from $0.42, excluding $0.6 million of stock-based compensation expense net of tax.

Now turning to our balance sheet. We ended the quarter with cash and cash equivalents of $53 million, up from $52.2 million at year-end 2024. Cash flow from operations was a strong $7.7 million for the quarter, up 17% from $6.6 million in Q2 of 2024 and $12 million for the first half, up 14% from $10.5 million. Free cash flow was $4.9 million for the quarter and $5.3 million for the first half, reflecting capital expenditures of $6.7 million year-to-date, primarily related to the new facility. We expect final payments of approximately $1.1 million for the facility in Q3, bringing the total construction cost to approximately $12.6 million.

And with that, I will turn the call over to the operator for questions. Operator?

[Operator Instructions] Our first question comes from the line of Frank Takkinen from Lake Street Capital Partners.

Congrats on all the progress and congrats on the 3870 clearance. I was hoping to start with one on kind of current backlog. I saw the comment and heard your positive remarks about a record backlog. Can you talk about the composition of that backlog and then kind of marry that into how you expect 3860 sales to trend in front of 3870 launching?

Sure. Sure. I can take that one, Frank. Yes, as we said, it was a record backlog as of June 30, and it was composed of both -- certainly, as we discussed the pumps, but also a very strong monitoring backlog as well. And so that certainly gives us, I think, good visibility into the second half of the year, especially with -- before we commercialize and introduce the 3870 that we have a strong backlog of 3860s to get us through what we see to the second half of the year.

Frank, I think -- Frank, it was just good to hear your voice. Thanks for the question. Maybe that was a 2-parter, you also want to know how the -- maybe the 3860s, the old pump, the legacy pump orders would trend. So -- I mean, they're still trending extraordinarily strong, and that's why we're so bullish as the year wraps up. We really feel at this point that we're more or less in control of how that will trail off, so -- and that comes to the timing of when we actually unleash our sales team to go out and actively in mass, start discussing this new pump. So they're not doing that at this point. We don't want them to do that. But certainly, somewhere in December is where we'll do that. And -- so we think the orders are still -- for the older pump will still be rather significant, quite strong right up until we do start to talk about the 3870 somewhere in December.

Got it. Very helpful. Clear. And then Roger, I wanted to follow up on some of your comments. I appreciate all the color on kind of 3870 renewal potential. How do you think about the cadence of that ramp to the $50 million of pump revenue? I assume it builds over time, but any thoughts around how that kind of scales throughout 2026 would be helpful.

Yes. Well, it will -- our plan, as we mentioned before, and I think we went over this on previous calls, is in Q4, we'll sell a few 3870s. It will be insignificant to revenue, but the purpose is not how much we generate revenue, it's to generate a few -- it's basically to generate feedback from a few of our stronger users as to any user suggestions or little tweaks that we might want to -- last-minute tweaks put into the product. So we plan to start that all right around Christmas time, New Year's.

And of course, then we will also be fully out showing the 3870 by that point as well. And so the bookings of the new pump in the first quarter, they won't be all the way ramped up to these numbers I was talking about at that point, certainly. They'll be just starting to bring in revenue. And as you understand, I think everybody understands, there's a pipeline and an inertia to people writing POs, even though due to this resale of 3860s that we've had going on, there will be a number of customers who have the funds budgeted, and we'll be switching those to the new pump as we can.

But Q1 on pump bookings overall, I expect to be weak. And we'll fill it with the revenue won't be though because we have such a huge backlog. So you won't really see it by looking at revenue, but bookings we anticipate in Q1 for pumps should be a little bit weak. But then by second quarter, we should be back to pretty strong run rate on booking pumps, which will just accelerate through Q3 and Q4 so that certainly by the end of 2026, as I think you could glean from what I was saying earlier, the overall run rate of the business will be towards that $100 million number and past it.

Got it. That makes sense. And then just last one for me. Obviously, you have a very large opportunity to harvest the renewal cycle with the 3870. But curious if you think the functionality and improvements of the 3870 could expand the overall market and demand in the pump area.

I haven't really even factored that in. But as you've heard us say over the last few years, you've been on these calls for a while, and those that have been on this call for a while heard us say, that this new pump is 20-year -- it's 2 decades improved over what we've been selling. And so we think and we decided to address one of the Achilles heels of this old pump, which was its usability. We made the new pump. As we've talked about in the past, it has a very -- compared to the old pump, let's call it, much more modern and interactive user interface. We have little graphics and animations on it that help lead the user through the use of the pump.

To some extent, we think that is the single largest deterrent that slows down the adoption of the older pump. And so yes, we feel that with the new pump being much more modern and with this much more user-friendly help that comes on the screen to guide the users through its use, that the greenfield, those folks that have sat on the fence and not adopted the older pump, we should knock them off at an accelerating rate. I didn't factor that into these numbers I'm talking about. So that is upside.

Our next question comes from the line of Jason Wittes from ROTH.

And solid quarter here. So first off, on the new pump, is there an ASP increase that we should be factoring in here?

I missed that.

What was the pricing on the new pump?

Oh, yes. Yes, I kind of alluded to that in what I said. We anticipate the ASP will be a little bit higher. We've had this question a few times in previous calls. And now, we're finally in the last -- just these last few weeks since we got clearance from FDA, we've really put the pencil to the pricing and modeled the pricing. So it looks like it's coming out where it's probably going to be around 12-ish percent more than the ASP of the existing pump.

Okay. That's good to hear. I guess, is there -- I mean, would that be -- is that possible to put some upward pressure on the gross margins from that pricing? Can we assume that as well? Or is it too early to make that call?

Well, yes, it should be reflected in that. And it might actually be reflected a little bit more so even in the gross margin because...

I meant gross margins, yes. But I'll take -- I actually -- operating margins will be more important, so that's even better to hear.

And then on the backlog, how long is it taking you guys to fulfill your backlog at this point? What is the, I guess, timing from an order to -- that goes in backlog to getting fulfilled?

Well, it's a little different between the pump and the monitor. The monitor backlog is running, as I recall, about 4 weeks, 5 weeks, somewhere in there. A pump backlog is running about 5 months, 5, 6 months, and we're letting that take place. As I mentioned, we anticipate bookings for pumps will be low in Q1 as we transition. But revenue won't be because we got this huge backlog of these older pumps to deliver. So yes, it's -- there's a good length of time in the backlog.

Okay. That's helpful. And then it sounds like customers -- there are going to be some upgrades from the backlog, but it doesn't sound like per se customers expecting pumps in the next -- certainly, for the rest of this year are necessarily going to be motivated to upgrade. They'll be happy getting just a new pump. Is that the right way to think about it? Or do you anticipate there's some upgrades there as well?

In this year, no, we're only targeting a limited number of facilities, basically 3, that we're going to deliver 40 to 50 of the new pumps and to watch those customers, I mentioned before, that we want to just use more as just any things that we need to put a finishing touch to that may come up during watching how people actually interact with and use the pump. And that's why we're going to deliberately have this delay in Q1 is because we're going to wait for that 2, 3 months of education from what we can learn from initially planting about 40 pumps.

At this time, I would now like to turn the conference back over to Roger Susi for closing remarks.

Again, thank you, operator. I'd like to thank those who have ridden along with us on this MRI niche journey, which though always maintaining great revenue growth and margins, at times provide a few white knuckle twists and turns, mainly due to the clearance process for this new pump. But it is with very clear vision we now see that road ahead, providing us many more years of rewarding growth as we can after nearly 20 years, offer our customers a path to move their MRI IV solution delivery onto our new exciting pump platform.

Thank you.

This concludes the call. You may now disconnect.