Company's Q3 2025: Contradictions Emerge on International Growth, U.S. Revenue, and Margin Guidance

Date of Call: November 12, 2025

Financials Results

• Revenue: $10M+ in Q3 (second consecutive quarter >$10M), up 27% YOY; company-reported overall KORU business growth 30% in the quarter; YTD revenue $30.2M, up 22% YOY; raised full-year guidance to $40.5–$41.0M (≈20%–22% growth)
• Gross Margin: 60.2% in Q3, down 320 bps YOY; YTD gross margin 62.1%; reiterated full-year gross margin guidance 61%–63%

Guidance:

• Full-year 2025 revenue raised to $40.5–$41.0M (≈20%–22% growth)
• Reaffirming full-year gross margin guidance of 61%–63%
• Reiterating positive cash flow from operations and expect to end year with at least $8.2M cash
• 510(k) filings (including oncology) expected end-2025 or Q1-2026 with commercial oncology entry targeted H2-2026
• Management expects 2026 growth rate likely to 'start with a two' (i.e., ~20%+), but not formal guidance

Business Commentary:

* Revenue and Market Growth: - KORU Medical Systems reported over $10 million in revenue for Q3, with 27% year-over-year growth. - Growth was driven by strong performance in the core subcutaneous immunoglobulin (SCIG) business, international expansion, and new additions to theügen's PFT pipeline.

• International Expansion and Share Gains:
• The company's international market share increased from 10% to 15%-20% of the $60 million OUS SCIG market in the past year.

• Growth was attributed to the shift to prefilled syringes in Europe and successful conversions from vials using the Freedom Infusion System.

• Strong SCIG Market Growth:

• External forecasts project SCIG market growth of 9% annually over the next five years, outpacing the IVIG segment.
• Growth is supported by factors such as increasing new patient diagnoses, broader diagnosis of secondary immunodeficiency, and pharma partner investments.

• Oncology Infusion Center Expansion:
• The company advances its entry into the oncology infusion space, with a successful U.S. pilot study and plans for a 510(k) submission to the FDA in Q4 2025 or Q1 2026.

• The oncology market presents a significant opportunity, with an addressable market for oncology infusion consumables projected to grow from $60 million in 2025 to $138 million by 2030.

• Pipeline and Collaborations:

• KORU has nine active collaborations with four potential new drugs expected to be added to its system by the end of 2026.
• These collaborations are a key driver of share gains and geographic expansion, reinforcing the strategy of partnering with pharma companies to accelerate adoption and growth.

Sentiment Analysis:

Overall Tone: Positive

• Management: "delivered strong results: accelerating revenue growth... 27% year-over-year growth"; raised full-year revenue guidance to $40.5-$41M; "achieved positive adjusted EBITDA, and generated positive cash flow." They reiterated gross margin guidance and highlighted international & prefills as major growth drivers.

Q&A:

• Question from Frank Takkinen (Lake Street Capital Markets): Could you expand on nurse feedback in the oncology pilot and comment on reimbursement and whether any work is needed there? Also any color on Q4 revenue breakout and initial thoughts on 2026?
  Response: Oncology pilot showed high nurse/patient satisfaction with 70% of nurses able to multitask; existing reimbursement covers pump administration; 510(k) expected end-2025/Q1-2026 with commercial entry H2-2026; Q4 mix ~70% US / ~23–24% international; management expects 2026 growth in the 20%+ range (not formal guidance).

• Question from Caitlin Roberts (Canaccord Genuity): Any more color on the EU prefilled-syringe opportunities—size, timing, which countries—and market growth dynamics including early flu season or SID trends into year-end and 2026?
  Response: Prefill conversions are the primary international growth driver, representing a $10M–$20M opportunity with most major-market work expected over the next ~24 months (many by end-2026); underlying patient diagnosis and SID trends are accelerating and could add upside beyond current plans.

• Question from Joseph Dowling (Piper Sandler): Directionally, how should we expect gross margins to develop over the next 12–18 months given international mix, manufacturing efficiencies, tariffs and pricing/new launches?
  Response: Management expects to maintain full-year margin guidance of 61%–63% despite international mix and tariffs, is pursuing manufacturing efficiencies and operational excellence, and targets 65%+ gross margin over the longer term.

• Question from Chase Knickerbocker (Craig Hallum): Clarify the $1.2M cross-geography adjustment and U.S. growth; any SCIG market growth metrics for Q3; cadence for prefills (country-by-country over 18–24 months?), and how you’ll prevent distributor cross-sales from recurring?
  Response: The $1.2M corrected the OUS-to-US distributor booking; implied U.S. growth ~mid-teens; SCIG market growth recently ~8–9%; prefills will roll out country-by-country with most major-market conversions by end-2026 (~24 months); contracts and tracing controls have been tightened to prevent recurrence.

Contradiction Point 1

International Revenue Growth and Expectations

It involves differing expectations and actual results regarding international revenue growth, which is a key growth driver for the company.

Can you detail the size and timeline of EU prefilled conversion opportunities? - Caitlin Roberts(Canaccord Genuity)

2025Q3: International expansion presents a $10-$20 million opportunity, driven largely by prefilled conversions. - Linda Tharby(CEO)

How should we assess international growth for the remainder of the year? Is the 30% target still valid for 2025? Would flat sequential international revenue result in approximately 50% year-over-year growth? - Anderson Schock(B. Riley Securities)

2025Q2: So, if you think about the back half, as we mentioned, we've had a very strong front half of about 35-or-so percent growth... You can expect that to increase significantly over that number... As we mentioned, when we think about the $1 million increase, I'd say that's primarily all into the international business. - Thomas Adams(CFO)

Contradiction Point 2

U.S. Revenue Growth and Dynamics

It involves differing explanations for the performance and expectations of U.S. revenue growth, which is a significant component of the company's overall revenue.

What are the dynamics affecting U.S. corporate and SCIG market growth? - Chase Knickerbocker(Craig Hallum)

2025Q3: U.S. growth was impacted by inventory and ordering dynamics. SCIG market growth remains strong due to PID and SID patient growth. - Linda Tharby(CEO)

Could you break down expectations between domestic and OUS performance and clarify the Q3 versus Q4 cadence? - Frank James Takkinen(Lake Street Capital Markets)

2025Q2: Domestically, yes, we did receive some work from a large U.S. distributor that they're going through an inventory reduction program here in Q3. So we see a little bit of drop-off in Q3 from that, but then we should see a bounce back up in Q4. - Thomas Adams(CFO)

Contradiction Point 3

International Expansion Opportunities

It highlights differing perspectives on the size and timing of international expansion opportunities, which are crucial for assessing company growth and market penetration strategies.

Can you clarify the size and timing of EU prefilled conversion opportunities? - Caitlin Roberts (Canaccord Genuity)

2025Q3: International expansion presents a $10-$20 million opportunity, driven largely by prefilled conversions. - Linda Tharby(CMO)

What's the current status of prefilled syringe penetration in the U.S. and tender opportunities outside the U.S.? - Caitlin Cronin (Canaccord Genuity)

2025Q1: We expect continued growth in our international operations, especially in emerging markets, which should drive meaningful top line contribution. - Linda Tharby(CMO)

Contradiction Point 4

Gross Margin Guidance

It involves changes in financial forecasts, specifically regarding gross margin expectations, which are critical indicators for investors.

How do you expect gross margins to develop over the next 12 to 18 months? - Joseph Dowling (Piper Sandler)

2025Q3: We're maintaining our margin guidance despite tariff and manufacturing challenges. - Tom Adams(CFO)

Can you update us on the e-Pump opportunity and oncology pilot progress? - Chase Knickerbocker (Craig Hallum)

2025Q1: Gross margins for Q3 are expected around 75%, with full-year guidance in the mid-70s. - Tom Adams(CFO)

Contradiction Point 5

Domestic Growth Drivers and Market Share Taking

It involves differing perspectives on the primary drivers of domestic growth and market share taking, which are crucial for revenue projections and strategic planning.

Can you clarify the dynamics affecting U.S. corporate growth and SCIG market growth? - Chase Knickerbocker (Craig Hallum)

2025Q3: U.S. growth was impacted by inventory and ordering dynamics. SCIG market growth remains strong due to PID and SID patient growth. - Linda Tharby(CEO)

How do domestic and international growth drivers from share taking versus new wins impact revenue growth? - Chase Knickerbocker (Craig-Hallum Capital Group)

2024Q4: Domestic growth driven by market share taking, pricing impact, and increased infections. - Tom Adams(CFO)