Iradimed Corp: Form 10-Q for the period ended Sep 30, 2026

The following discussion and analysis should be read in conjunction with (i) our unaudited condensed financial statements and the related notes thereto included in this Quarterly Report, (ii) discussions under "Part I, Item 1. Business,” “Part I, Item 1A. Risk Factors,” and “Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations” in the 2025 Annual Report, and (iii) “Part II, Item 1A. Risk Factors” and the “Cautionary Statements Regarding Forward-Looking Statements” section included in this Quarterly Report.

Presentation of Amounts

Unless otherwise indicated, dollar amounts in the tables in this Item 2 are presented in thousands, and dollar amounts in the narrative discussion are presented in millions, rounded to one decimal place, or in thousands where so indicated. Percentage changes and percentages of total revenue are calculated using the amounts in thousands presented in the tables, except for per share amounts, which are calculated using unrounded amounts. As a result, percentages recalculated using the rounded amounts in millions may differ from those presented.

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. We are the only known provider of non-magnetic IV infusion pump systems 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 systems have 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 solutions provide 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 generally 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 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 peripheral oxygen saturation (SpO2) monitoring 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.

We generate revenue from the sale of MRI compatible medical devices and accessories, extended maintenance 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 U.S. and internationally. As of September 30, 2026, our direct U.S. sales force consisted of 28 field sales representatives, 4 regional sales directors and supplemented by 12 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 September 30, 2026, our revenue increased by $3.0 million, or 14%, to $24.2 million from $21.2 million compared to the same period of 2025. Income before the provision for income taxes was $8.7 million for the quarter ended September 30, 2026, compared to $7.3 million for the quarter ended September 30, 2025. Net income was $6.5 million, or $0.51 per diluted share, in the quarter ended September 30, 2026, compared to $5.6 million, or $0.43 per diluted share in the quarter ended September 30, 2025.

For the fiscal year 2026, we expect higher revenue when compared to the fiscal year 2025 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 fiscal year 2025 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 2025 Annual Report under “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our business in fiscal year 2026 has been impacted, and we believe will continue to be impacted, by the recent developments and trends described in the 2025 Annual Report and in this Quarterly Report.

In February 2026, the Supreme Court of the United States held that the International Emergency Economic Powers Act (“IEEPA”) does not authorize the President to impose tariffs, invalidating certain tariffs imposed under that statute. Subsequent administrative and judicial developments have established procedures for seeking refunds of previously paid IEEPA tariffs, subject to eligibility requirements, administrative processes and ongoing litigation. The Company continues to monitor changes in U.S. tariff policy, including tariffs imposed under other statutory authorities that are not affected by the decision.

The Company has submitted refund claims for IEEPA tariffs paid on certain imported materials and components and has received refunds, which did not have a material impact on its financial condition or results of operations for the three and nine months ended September 30, 2026. The Company continues to evaluate additional customs entries that may be eligible for refund. The Company records refunds when realized and the amount and timing of any further recovery depend on, among other things, the status of the relevant entries, compliance with procedural requirements and the outcome of ongoing proceedings.

The Company continues to monitor ongoing geopolitical developments, including the current conflicts in the Middle East, and the potential impacts on global trade policies and economic conditions. These events have contributed to increased uncertainty in international markets, including potential disruptions to supply chains, fluctuations in commodity and transportation costs, and evolving trade regulations. The Company has not experienced a material adverse impact on its operations or financial condition as a direct result of these developments. However, the situation remains dynamic, and the extent to which these geopolitical events may affect the Company’s business, results of operations, or financial condition in future periods remains uncertain. The Company will continue to actively assess potential risks and implement mitigation strategies, where appropriate, to address any emerging impacts.

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 2025 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 September 30, 2026, there were no material changes to the information provided regarding recent accounting pronouncements in Note 1 to the Financial Statements in the 2025 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.

(unaudited)

(unaudited)

Comparison of the Three Months Ended September 30, 2026 and 2025

Revenue by Geographic Region

(in thousands)

(unaudited)

(unaudited)

20

Revenue by Type

(in thousands)

(unaudited)

(unaudited)

For the three months ended September 30, 2026, total revenue increased by $3.0 million, or 14%, to $24.2 million from $21.2 million for the same period in 2025. This increase is primarily attributed to modifications to our sales incentive plan for patient vital signs monitoring systems, infusion pump systems, and disposables.

Revenue from sales in the U.S. increased by $1.6 million, or 9%, to $19.7 million for the three months ended September 30, 2026, from $18.1 million for the same period in 2025. Revenue from sales internationally increased by $1.4 million, or 45%, to $4.5 million from $3.1 million for the same period in 2025. Domestic sales accounted for 82% of revenue for the three months ended September 30, 2026 and 85% of revenue for the same period in 2025.

Revenue from sales of devices increased by $1.6 million, or 10%, to $17.2 million for the three months ended September 30, 2026, from $15.6 million for the same period in 2025. Revenue from the amortization of extended maintenance agreements increased by $0.2 million, or 31%, to $0.8 million for the three months ended September 30, 2026 from $0.6 million for the three months ended September 30, 2025. Revenue from sales of disposables increased by $0.9 million, or 21%, to $5.0 million for the three months ended September 30, 2026 from $4.1 million for the three months ended September 30, 2025. Revenue from services and other increased by $0.3 million, or 42%, to $1.2 million from $0.9 million for the same period in 2025.

For the nine months ended September 30, 2026, total revenue increased by $5.5 million, or 9%, to $66.6 million from $61.1 million for the same period in 2025. This increase is primarily attributed to sales of our new MRidium® 3870 IV infusion pump system, disposables, modification to sales incentive plan for patient vital signs monitoring systems, and increase in Ferro Magnetic Detection System sales.

Revenue from sales in the U.S. increased by $2.2 million, or 4%, to $54.5 million for the nine months ended September 30, 2026, from $52.3 million for the same period in 2025. Revenue from sales internationally increased by $3.3 million, or 37%, for the nine months ended September 30, 2026 to $12.2 million, from $8.9 million for the same period in 2025. Domestic sales accounted for 82% of revenue for the nine months ended September 30, 2026, and 85% of revenue for the same period in 2025.

Revenue from sales of devices increased by $3.3 million, or 8%, to $46.4 million for the nine months ended September 30, 2026, from $43.2 million for the same period in 2025. Revenue from the amortization of extended maintenance agreements increased by $0.5 million, or 26%, to $2.2 million for the nine months ended September 30, 2026, from $1.8 million for the nine months ended September 30, 2025. Revenue from sales of our disposables increased by $1.4 million, or 10%, to $14.7 million for the nine months ended September 30, 2026, from $13.3 million for the same period in 2025. Revenue from services and other increased by $0.5 million, or 15%, to $3.4 million for the nine months ended September 30, 2026, from $2.9 million for the nine months ended September 30, 2025.

Cost of Revenue and Gross Profit

(in thousands)

(unaudited)

(unaudited)

For the three months ended September 30, 2026, our cost of revenue increased by $1.0 million, or 22%, to $5.7 million from $4.7 million for the same period in 2025. For the three months ended September 30, 2026, our gross profit increased by $2.0 million, or 12%, to $18.5 million from $16.5 million for the same period in 2025. For the three months ended September 30, 2026, gross profit margin decreased to 76% compared to 78% for the same period in 2025. The decrease in gross margin is attributed to initial production inefficiencies on new product manufacturing.

For the nine months ended September 30, 2026, our cost of revenue increased by $2.4 million, or 17%, to $16.2 million from $13.8 million for the same period in 2025. For the nine months ended September 30, 2026, our gross profit increased by $3.1 million, or 7%, to $50.4 million from $47.3 million for the same period in 2025. For the nine months ended September 30, 2026, gross profit margin decreased to 76% compared to 77% for the same period in 2025.

Operating Expenses

(in thousands)

(unaudited)

(unaudited)

General and Administrative

For the three months ended September 30, 2026, general and administrative expense increased by $0.2 million, or 4%, to $4.5 million from $4.4 million for the same period in 2025. This increased primarily because of higher legal and professional, consulting, and payroll and benefit expenses.

For the nine months ended September 30, 2026, general and administrative expense decreased by $0.3 million, or 2%, to $13.0 million from $13.2 million for the same period in 2025. This decreased primarily because of lower legal and professional expenses and regulatory consulting expenses.

Sales and Marketing

For the three months ended September 30, 2026, sales and marketing expense increased by $0.3 million, or 6%, to $4.9 million from $4.6 million for the same period in 2025. This increase is primarily due to increased sales commissions related to increased monitor and newly released MRidium® 3870 IV infusion pump system bookings.

For the nine months ended September 30, 2026, sales and marketing expense increased by $0.4 million, or 3%, to $13.2 million from $12.8 million for the same period in 2025. This increase is primarily due to increased sales commissions related to increased monitor and newly released MRidium® 3870 IV infusion pump system bookings.

Research and Development

For the three months ended September 30, 2026, research and development expense increased by $0.2 million, or 30%, to $0.9 million from $0.7 million for the same period in 2025. This is primarily due to a decrease in payroll and benefit expenses capitalized as internal software development for the current period.

For the nine months ended September 30, 2026, research and development expense increased by $0.3 million, or 14%, to $2.5 million from $2.2 million for the same period in 2025. This increase is primarily due to an increase in payroll

and benefit expenses. Payroll expenses related to the MRidium® 3870 IV infusion pump system, were capitalized for the first six months in 2025 and were offset by current period capitalized software.

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 September 30, 2026, other income, net increased $65 thousand, or 14%, to $529 thousand from $464 thousand for the same period in 2025.

For the nine months ended September 30, 2026, other income, net, increased by $42 thousand, or 3%, to $1,559 thousand from $1,517 thousand for the same period in 2025. This income is primarily interest received in 2026 and 2025 on money market fund investments.

Income Taxes

For the three and nine months ended September 30, 2026, we recorded a provision for income tax expense of $2.2 million and $5.8 million, respectively. For the three and nine months ended September 30, 2026, our effective tax rate was 24.9% and 24.8%, respectively, and differed from the U.S. federal statutory rate primarily due to U.S. state income tax expense, and non-deductible compensation expenses, partially offset by tax benefits related to foreign-derived income and research and development tax credits.

For the three and nine months ended September 30, 2025, we recorded a provision for income tax expense of $1.7 million and $4.5 million, respectively. For the three and nine months ended September 30, 2025, our effective tax rate was 23.6% and 22.0%, respectively, and differed from the U.S. federal statutory rate primarily due to U.S. state income tax expense, partially offset by tax benefits related to foreign-derived income and research and development tax credits.

We file tax returns in the U.S. federal jurisdiction and many U.S. state jurisdictions. Our returns are not currently under examination by the Internal Revenue Service. The Company remains subject to income tax examinations for our U.S. federal and certain U.S. state income taxes for 2023 and subsequent years.

On July 4, 2025, the OBBBA was enacted in the United States. The OBBBA includes several significant provisions, including 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, such as accelerated deductions for qualified property and domestic research expenditures. The Company has evaluated the impact of the OBBBA on its financial statements and does not expect the legislation to result in a material change to its annual effective tax rate. During the first quarter of 2026, the Company implemented the OBBBA‑related changes to the foreign‑derived deduction regime, including the transition from the FDII deduction to the FDDEI deduction, which became effective for tax years beginning after December 31, 2025.

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.

As of September 30, 2026, we had cash and cash equivalents of $63.3 million, stockholders’ equity of $106.5 million, and working capital of $82.5 million. As of December 31, 2025, we had cash and cash equivalents of $51.2 million, stockholders’ equity of $94.6 million, and working capital of $71.0 million.

We believe that our current cash, and 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. Various economic conditions (including persistent inflationary pressures, elevated or volatile interest rate levels, and the imposition of, expansion of, or changes in tariffs or other trade restrictions) may disrupt capital markets at any time, which could reduce our ability to access capital and negatively affect our liquidity in the future.

(in thousands)

(unaudited)

Cash provided by operating activities increased by $2.2 million, to $21.2 million for the nine months ended September 30, 2026, compared to $19.0 million for the same period in 2025. During the nine months ended September 30, 2026, cash provided by operations was positively impacted by higher net income, a smaller increase in accounts receivable, and higher accounts payable. These positive impacts were partially offset by higher income tax payments, increased inventory purchases, and a smaller increase in deferred revenue.

Cash used in investing activities decreased by $6.9 million, to $1.1 million for the nine months ended September 30, 2026, compared to $8.0 million for the same period in 2025. The decrease from our 2025 spend in investing activities is attributed to construction costs of the completed new executive offices and expanded manufacturing facility to accommodate our continued growth.

Cash used in financing activities increased by $1.3 million, to $8.0 million for the nine months ended September 30, 2026, compared to approximately $6.7 million for the same period in 2025. The increase is primarily due to the per share increase of our 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.

Off-Balance Sheet Arrangements

As of September 30, 2026 and December 31, 2025, 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, 2025.

Recent Accounting Pronouncements

As of September 30, 2026, there were no material changes to the information provided regarding recent accounting pronouncements in Note 1 to the Financial Statements in the 2025 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 2025 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 September 30, 2026. Our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of September 30, 2026 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 have 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 2025 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 2025 Annual 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.