Iradimed Corp: Form 10-Q for the period ended Jun 30, 2025

The following discussion and analysis should be read in conjunction with our unaudited condensed financial statements and the related notes to those statements included in this Quarterly Report, the discussion of certain risks and uncertainties contained in (i) “Part I, Item 1. Business,” “Part 1, Item 1A. Risk Factors,” and the discussion under “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2024 Annual Report and (ii) “Part II, Item 1A. Risk Factors” and the “Cautionary Statements Regarding Forward-Looking Statements” section included in this Quarterly Report.

Our Business

We develop, manufacture, market, sell, and distribute MRI compatible medical devices and product related accessories, disposables, and services.

We are a leader in the development of innovative MRI compatible medical devices and products. We are the only known provider of a non-magnetic IV infusion pump system that is specifically designed to be safe for use during MRI procedures. We were the first to develop an infusion delivery system that largely eliminates many of the dangers and problems present during MRI procedures. Standard infusion pumps contain magnetic and electronic components, which can create radio frequency interference and are dangerous to operate in the presence of the powerful magnet that drives an MRI system. Our patented MRidium® MRI compatible IV infusion pump system has been designed with a non-magnetic ultrasonic motor, uniquely designed non-ferrous parts and other special features to safely and predictably deliver anesthesia and other IV fluids during various MRI procedures. Our pump solution provides a seamless approach that enables accurate, safe and dependable fluid delivery before, during and after an MRI scan, which is important to critically ill patients who cannot be removed from their vital medications, and children and infants who must generally be sedated to remain immobile during an MRI scan.

Each IV infusion pump system consists of an MRidium® MRI compatible IV infusion pump, non-magnetic mobile stand, proprietary disposable IV tubing sets and many of these systems contain additional optional upgrade accessories.

Our patented 3880 MRI compatible patient vital signs monitoring system has been designed with non-magnetic components and other special features to safely and accurately monitor a patient’s vital signs during various MRI procedures. The IRADIMED 3880 system operates dependably in magnetic fields up to 30,000 gauss, which means it can operate virtually anywhere in the MRI scanner room. The IRADIMED 3880 has a compact, lightweight design allowing it to travel with the patient from their critical care unit to the MRI and back, resulting in increased patient safety through uninterrupted vital signs monitoring and decreasing the amount of time critically ill patients are away from critical care units. The features of the IRADIMED 3880 include: wireless Electrocardiogram (ECG) with dynamic gradient filtering; wireless blood oxygen saturation monitoring (SpO2) using Masimo® algorithms; non-magnetic respiratory carbon dioxide (CO2); invasive and non-invasive blood pressure; patient temperature; and optional advanced multi-gas anesthetic agent unit featuring continuous Minimum Alveolar Concentration measurements. The IRADIMED 3880 MRI compatible patient vital signs monitoring system has an easy-to-use design and allows for the effective communication of patient vital signs information to clinicians.

Our Model 3600 ferromagnetic detection device, IRadimed FMD1, with remote alarm logging unit (“RALU”) is the first ferromagnetic detection device with TruSenseTM threat qualification technology. Our patent pending TruSenseTM technology predicts an approaching ferrous hazard by uniquely sensing a threat’s speed, trajectory, and MRI Zone IV door status with IRADIMED’s expertise in Dynamic Signal Processing. This technology reduces false alarms, all while simultaneously circumventing background magnetic field noise. The Model 3600 FMD1 can be self-installed and does not require drilling, special tools, permits or contractors like traditional FMD systems. The wireless touchscreen, RALU, is unique in the industry and provides a full color visual representation of the MRI door and FMD status. When an incident occurs, this wireless touchscreen uniquely allows users to quickly and easily log all ferrous items as they enter the MRI Zone IV improving the reporting accuracy hospitals require for accreditation.

We generate revenue from the sale of MRI compatible medical devices and related products, accessories, extended warranty agreements, services related to maintaining our products and the sale of disposable products used with our devices. The principal customers for our MRI compatible products include hospitals and acute care facilities, both in the United States and internationally. As of June 30, 2025, our direct U.S. sales force consisted of 27 field sales representatives, 4 regional sales directors and supplemented by 9 clinical application specialists. Internationally, we have distribution agreements with independent distributors selling our products.

Selling cycles for our devices have varied widely and have historically ranged between three and six months in duration. We also enter into agreements with integrated delivery networks (“IDNs”) and healthcare supply contracting companies, which are commonly referred to as group purchasing organizations (“GPOs”) in the U.S., which enable us to sell and distribute our products to their member hospitals. GPOs negotiate volume purchase prices for hospitals, group practices, and other clinics that are members of a GPO. Under our GPO agreements, we are required to pay the GPOs a fee of three percent of the sales of our products to members of the GPO. Sales to participating IDNs do not have an associated fee.

Financial Highlights

For the quarter ended June 30, 2025, our revenue increased by $2.5 million, or 14% to $20.4 million, compared to $17.9 million for the quarter ended June 30, 2024. Income before the provision for income taxes was $7.3 million for the quarter ended June 30, 2025, compared to $6.3 million for the quarter ended June 30, 2024. Net income was $5.8 million, or $0.45 per diluted share, in the quarter ended June 30, 2025, compared to $4.9 million, or $0.38 per diluted share in the quarter ended June 30, 2024.

For the remainder of fiscal year 2025, we expect higher revenue when compared to the same period in 2024 primarily due to higher sales of our medical devices and products, related accessories, disposables, and services. We also expect higher operating expenses compared to the same period in 2024 primarily due to higher sales and marketing, regulatory, and general and administrative expenses.

Recent Developments and Trends

In addition to the trends identified in the 2024 Annual Report under “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in the Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 (the “Q1 2025 Quarterly Report”) under “Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our business in fiscal year 2025 has been impacted, and we believe will continue to be impacted, by the recent developments and trends stated therein and herein.

Additionally, the Company continues to monitor ongoing changes to global trade policies, including the imposition of tariffs, and the Company is implementing plans to mitigate related impacts associated with the tariffs.

On May 29, 2025, the Company announced that the FDA has granted 510(k) clearance for the Company’s next-generation MRidium® 3870 IV infusion pump system (the “MRidium® 3870”).

The MRidium® 3870 is an advanced, MRI compatible infusion pump that extends the Company’s unique position as the world’s only supplier of non-magnetic MRI infusion pump devices, addressing growing demands for safe and reliable fluid delivery in diagnostic imaging. The MRidium® 3870 features a non-magnetic ultrasonic pump motor, non-interfering radio frequency emissions, and non-ferrous components, ensuring seamless performance in high-magnetic-field environments.

The Company plans an initial strategic rollout of the newly FDA-cleared MRidium® 3870 infusion pump deployment to select healthcare facilities in the fourth quarter of 2025, with product shipments growing towards full commercial distribution throughout 2026.

On July 4, 2025, the OBBBA was enacted into law in the U.S. and includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA includes various provisions that will impact the Company’s tax position, the most potentially impactful of which are the changes to Section 174 of the Internal Revenue Code of 1986, as amended, that allows for immediate expensing of all domestic research and experiential expenditures and increases first-year bonus depreciation from 40% to 100%. We are currently assessing its impact on our financial statements. These changes are not effective as of June 30, 2025, and expected to be recorded in the Company’s Q3 results.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based on our unaudited condensed financial statements, which we have prepared in accordance with GAAP. The preparation of these unaudited condensed financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements as well as the reported revenue and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and judgments. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe that the estimates, assumptions and judgments involved in the accounting policies described in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2024 Annual Report have the greatest potential impact on our financial statements, so we consider them to be our critical accounting policies and estimates. As of June 30, 2025, there were no material changes to the information provided regarding recent accounting pronouncements in Note 1 to the Financial Statements in the 2024 Annual Report.

Results of Operations

The following table sets forth selected statements of operations data as a percentage of total revenue for the periods indicated. Our historical operating results are not necessarily indicative of the results for any future period.

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Comparison of the Three Months Ended and the Six Months Ended June 30, 2025 and 2024

Revenue by Geographic Region

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Revenue by Type

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For the three months ended June 30, 2025, total revenue increased by $2.5 million, or 14%, to $20.4 million from $17.9 million for the same period in 2024. This is attributed to continued demand for our IV infusion pump system, disposables, amortization of extended warranty revenue, and modifications to our sales incentive plan for patient vital signs monitoring systems.

Revenue from sales in the U.S. increased by $2.7 million, or 17%, to $18.2 million for the three months ended June 30, 2025, from $15.5 million for the same period in 2024. Revenue from sales internationally decreased by $0.2 million, or 8%, for the three months ended June 30, 2025 to $2.2 million, from $2.4 million for the same period in 2024. Domestic sales accounted for 89% of revenue for the three months ended June 30, 2025, compared to 86% for the same period in 2024.

Revenue from sales of devices increased by $1.9 million, or 15%, to $14.6 million for the three months ended June 30, 2025, from $12.7 million for the same period in 2024. Revenue from the amortization of extended warranty agreements increased by $24 thousand, or 4%, to $592 thousand for the three months ended June 30, 2025, from $568 thousand for the three months ended June 30, 2024. Revenue from sales of our disposables increased by $0.5 million, or 14%, to $4.2 million for the three months ended June 30, 2025, from $3.7 million for the same period in 2024. Revenue from the services and other increased by $32 thousand, or 3%, to $1.0 million for the three months ended June 30, 2025, from $967 thousand for the three months ended June 30, 2024.

For the six months ended June 30, 2025, total revenue increased by $4.4 million, or 12%, to $39.9 million from $35.5 million for the same period in 2024. This is attributed to continued demand for our IV infusion pump system, disposables, amortization of extended warranty revenue, and modification to sales incentive plan for patient vital signs monitoring systems.

Revenue from sales in the U.S. increased by $5.2 million, or 18%, to $34.1 million for the six months ended June 30, 2025, from $28.9 million for the same period in 2024. Revenue from sales internationally decreased by $0.9 million, or 13%, for the six months ended June 30, 2025 to $5.8 million, from $6.6 million for the same period in 2024.

Domestic sales accounted for 86% of revenue for the six months ended June 30, 2025, compared to 81% for the same period in 2024.

Revenue from sales of devices increased by $3.0 million, or 12%, to $27.6 million for the six months ended June 30, 2025, from $24.6 million for the same period in 2024. Revenue from the amortization of extended warranty agreements increased by $0.1 million, or 9%, to $1.2 million for the six months ended June 30, 2025, from $1.1 million for the six months ended June 30, 2024. Revenue from sales of our disposables increased by $1.4 million, or 19%, to $9.2 million for the six months ended June 30, 2025, from $7.7 million for the same period in 2024. Revenue from the services and other decreased by $0.2 million, or 9%, to $2.0 million for the six months ended June 30, 2025, from $2.2 million for the six months ended June 30, 2024.

Cost of Revenue and Gross Profit

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For the three months ended June 30, 2025 our cost of revenue increased by $0.5 million, or 15%, to $4.5 million from $3.9 million for the same period in 2024. For the three months ended June 30, 2025, our gross profit increased by $2.0 million, or 14%, to $16.0 million from $14.0 million for the same period in 2024. Gross profit margin remained at 78% for both the three months ended June 30, 2025 and 2024.

For the six months ended June 30, 2025, our cost of revenue increased by $1.0 million, or 12%, to $9.1 million from $8.1 million for the same period in 2024. For the six months ended June 30, 2025, our gross profit increased by $3.4 million, or 12%, to $30.8 million from $27.4 million for the same period in 2024. Gross profit margin remained at 77% for both the six months ended June 30, 2025 and 2024.

Operating Expenses

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General and Administrative

For the three months ended June 30, 2025, general and administrative expense increased by $0.2 million, or 4%, to $4.3 million from $4.1 million for the same period in 2024. This increase is primarily due to higher legal and professional expenses, regulatory consulting, software maintenance, and increased payroll and benefit expenses.

For the six months ended June 30, 2025, general and administrative expense increased by $0.8 million, or 10%, to $8.9 million from $8.1 million for the same period last year. This increase is primarily due to higher legal and professional expenses, regulatory consulting, and payroll and benefits expenses.

Sales and Marketing

For the three months ended June 30, 2025, sales and marketing expense increased by $0.5 million, or 15%, to $4.0 million from $3.5 million for the same period in 2024. This increase is primarily due to higher sales commissions, sales activities expenses, and payroll and benefits expenses.

For the six months ended June 30, 2025, sales and marketing expense increased by $0.9 million, or 12%, to $8.2 million from $7.3 million for the same period last year. This increase is primarily due to higher sales commissions, sales activities expenses, and payroll and benefits expense.

Research and Development

For the three months ended June 30, 2025, research and development expense increased by $0.1 million, or 10%, to $0.9 million from $0.8 million for the same period in 2024. This is primarily due to an increase in payroll and benefit expenses related to the newly cleared MRidium® 3870 IV infusion pump system.

For the six months ended June 30, 2025, research and development expense decreased $0.1 million, or 7%, to $1.5 million from $1.6 million for the same period last year. This is primarily due to decreased prototype and consulting expenses related to the MRidium® 3870 IV infusion pump system.

Other Income, Net

Other income, net consists of interest income, (the largest component), foreign currency gains and losses, and other miscellaneous income. For the three months ended June 30, 2025, other income, net decreased $0.1 million, or 17%, to $0.5 million from $0.6 million for the same period in 2024.

For the six months ended June 30, 2025 and 2024, other income, net, remained consistent at $1.1 million for both periods. This income is primarily interest received in 2025 and 2024 on money market fund investments.

Income Taxes

For the three and six months ended June 30, 2025, we recorded a provision for income tax expense of $1,553,283 and $2,811,283, respectively. Our effective tax rate was 21.2% for the three and six months ended June 30, 2025 and differed from the U.S. federal statutory rate primarily due to U.S. state income tax expense, partially offset by research and development tax credits.

For the three and six months ended June 30, 2024, we recorded a provision for income tax expense of $1,368,036 and $2,475,004, respectively. For the three and six months ended June 30, 2024, our effective tax rate was 21.8% and 21.5%, respectively, and differed from the U.S. federal statutory rate primarily due to U.S. state income tax expense, partially offset by benefits from research and development tax credits.

On July 31, 2024, the Company received a notice of examination from the U.S. Internal Revenue Service for the tax year ended December 31, 2021. We are currently complying with the taxing authority and believe our tax position for the year under review was appropriate and have not accounted for any proposed adjustments at this time. The Company remains subject to income tax examinations for our U.S. federal and certain U.S. state income taxes for 2020 and subsequent years.

Liquidity and Capital Resources

Our principal sources of liquidity have historically been our cash and cash equivalents balances, cash flow from operations and access to the financial markets. Our principal uses of cash are operating expenses, working capital requirements, capital expenditures and dividend payments, if any.

As of June 30, 2025, we had cash and cash equivalents of $53.0 million, stockholders’ equity of $94.3 million, and working capital of $68.6 million. As of December 31, 2024, we had cash and cash equivalents of $52.2 million, stockholders’ equity of $86.8 million, and working capital of $66.7 million.

On April 3, 2024, the Company filed a shelf registration statement on Form S-3 (the “2024 Shelf”), which was declared effective by the SEC on May 8, 2024. The 2024 Shelf covers the offering, issuance and sale by the Company of up to an aggregate of $75.0 million of its common stock. As of June 30, 2025, all $75.0 million remained available under the 2024 Shelf.

We believe that our current cash, and any cash generated from operations will be sufficient to meet our ongoing operating requirements for at least the next 12 months and into the foreseeable future. We do not anticipate requiring additional capital; however, if required or desirable, we may seek to obtain a credit facility, raise debt, or issue additional equity in private or public markets. However, various economic conditions might disrupt capital markets at any time, which could reduce our ability to access capital and negatively affect our liquidity in the future.

(unaudited)

Cash provided by operating activities increased by $1.5 million, to $12.0 million for the six months ended June 30, 2025, compared to $10.5 million for the same period in 2024. During the six months ended June 30, 2025, cash provided by operations was positively impacted by higher net income, lower cash outflows related to accounts payable, and negatively impacted by increased inventory purchases, prepaid expenses and accounts receivable.

Cash used in investing activities increased by $5.0 million, to $6.7 million for the six months ended June 30, 2025, compared to $1.7 million for the same period in 2024. The majority of our 2025 spend in investing activities is attributed to construction costs of the New Facility (see Note 11 to the Financial Statements in this Quarterly Report) to accommodate our anticipated growth.

Cash used in financing activities decreased by $5.5 million, to $4.5 million for the six months ended June 30, 2025, compared to approximately $10.0 million for the same period in 2024. The decrease is primarily due to December 2023 declaration of a special cash dividend and subsequent payment in the first quarter of 2024. In the second quarter of 2024, the Company commenced paying a regular quarterly cash dividend payment. Special and quarterly cash dividend payments are subject to the sole discretion of the Board and applicable law.

We market our products to end users in the U.S. and to distributors internationally. Sales to end users in the U.S. are generally made on open credit terms. Management maintains an allowance for potential credit losses.

Our current manufacturing and headquarters facility has been leased from Susi, LLC, an entity controlled by our President, Chief Executive Officer, and Chairman of the Board, Roger Susi. Pursuant to the terms of the Lease Amendment, the monthly base rent is $34,133, adjusted annually for changes in the consumer price index. During the third quarter of 2025, the Company will complete its move to the New Facility and terminate the month-to-month lease with Susi, LLC under the Lease Amendment.

Off-Balance Sheet Arrangements

As of June 30, 2025 and December 31, 2024, we did not have any off-balance sheet arrangements, as such term is defined under Item 303 of Regulation S-K, that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Contractual Obligations

There have been no material changes outside the ordinary course of business to our contractual obligations and commercial commitments since December 31, 2024.

Recent Accounting Pronouncements

As of June 30, 2025, there were no material changes to the information provided regarding recent accounting pronouncements in Note 1 to the Financial Statements in the 2024 Annual Report.

There have been no material changes in our market risks from those disclosed in “Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk” of the 2024 Annual Report.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are designed to ensure that: (1) information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms; and (2) such information is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2025. Our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of June 30, 2025 were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In addition to the other information set forth in this Quarterly Report, you should carefully consider the risks discussed in our 2024 Annual Report and those set forth from time to time in our other filings with the SEC. There have been no material changes in our risk factors from those described in our 2024 Annual Report and the Q1 2025 Quarterly Report. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition, or future results.