Iradimed's Q3 2025: Contradictions Emerge on Pump Sales Ramp, Gross Margin Outlook, Inventory Strategy, and Financial Forecasting

Date of Call: November 3, 2025

Financials Results

• Revenue: $21.2M, up 16% YOY (from $18.3M in Q3 2024)
• EPS: GAAP: $0.43 per diluted share, up 12% YOY (from $0.40); Non-GAAP: $0.47 per diluted share, up 9% YOY (from $0.43)
• Gross Margin: 78%, compared to 77% in Q3 2024

Guidance:

• Q4 2025 revenue expected $21.4M to $22.4M; GAAP diluted EPS $0.43 to $0.47; non-GAAP diluted EPS $0.47 to $0.50.
• Full year 2025 revenue raised to $82.5M to $83.5M; GAAP EPS $1.68 to $1.72; non-GAAP EPS $1.84 to $1.88.
• Q4 dividend of $0.17 per share declared, payable Nov 25, 2025.
• 3870 rollout: initial 23-system delivery in December; U.S. sales rollout after mid-January national meeting; bookings build in Q2 2026 with revenue ramping in H2 2026; international (CE/MDR, Japan) expected to convert to 3870 in 2027.

Business Commentary:

* Consecutive Revenue Growth: - IRADIMED achieved its 17th consecutive quarter of record revenue, with $21.2 million reported in Q3 2025, up 16% from the previous year. - The growth was driven by strong performance in pump shipments, notably the 3860 MRI IV pump, which grew 20% year-over-year.

• Product Line Performance:
• MRI compatible IV infusion pump systems contributed $8.3 million, up 20% year-over-year, while patient vital signs monitoring systems contributed $6.9 million, up 16%.

• Growth in these segments was supported by increased utilization and a focus on monitoring sales for 2025.

• New 3870 MRI IV Pump Launch:

• The rollout of the new 3870 MRI IV pump is expected to drive significant growth, especially through a large replacement opportunity for aging pumps.

• With approximately 6,300 5-plus-year-old 3860 pump channels up for replacement in the U.S. alone, IRADIMED plans to add another 1,000 channels per year through replacement sales.

• Financial Guidance and Earnings:

• IRADIMED raised its full-year 2025 guidance to $82.5 million to $83.5 million, with GAAP diluted EPS expected at $1.68 to $1.72.

• The increase in guidance reflects strong Q3 performance and confidence in future growth driven by the 3870 pump launch and replacement opportunities.

• Manufacturing and Facility Expansion:

• The company successfully transitioned manufacturing operations into a new facility, with no negative impacts on revenue or cost of goods.
• The new facility is 2.5x the size of the previous one, allowing for increased capacity and potential future expansion without additional construction costs.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted the "17th consecutive quarter of record revenue," reported revenue of $21.2M (up 16% YOY), sustained a 78% gross margin, and raised full-year guidance to $82.5M-$83.5M with higher GAAP and non-GAAP EPS ranges.

Q&A:

• Question from Frank Takkinen (Lake Street Capital Markets): When should we expect the pump business to reach the ~$50M pump revenue run rate — late 2026 or 2027?
  Response: Management: Sales launch in mid‑January; bookings to build in Q2 2026 with revenue ramping in H2 2026 and clear, material contribution by Q4 2026.

• Question from Frank Takkinen (Lake Street Capital Markets): You maintained a 78% gross margin despite the manufacturing transition—does that imply potential to reach ~80% or was this mix-driven?
  Response: Management: Transition execution minimized negative impact; the ~1% margin improvement was largely due to stronger domestic mix; margins may fluctuate with domestic vs international mix.

• Question from Kyle Bauser (ROTH Capital Partners): Is pricing stable on the legacy 3860 given strong demand — any discounting planned as you roll out 3870?
  Response: Management: No discounts; 3860 orders are selling at existing ASPs with pricing stable.

• Question from Kyle Bauser (ROTH Capital Partners): How are you managing inventory for the 3870 ahead of launch and what are current build plans?
  Response: Management (CFO): Buying for 3870 has begun; inventory builds in Q4 and into Q1 are planned and working capital is sufficient to support the builds.

• Question from Kyle Bauser (ROTH Capital Partners): What is the plan and timing to enter international markets with the 3870 (CE/other approvals)?
  Response: Management: International rollout is regulatory-driven; targeting MDR/CE registration and Japan clearance with conversion to 3870 expected in 2027 (MDR work progressing through late 2026).

• Question from Kyle Bauser (ROTH Capital Partners): The new facility is ~2.5x larger—what sales/capacity can it support?
  Response: Management: Facility is 2.5x larger, unconstrained by land, and can support up to ~$50M per quarter in sales with easy expansion into adjacent owned land.

Contradiction Point 1

Pump Sales and Revenue Ramp

It involves differing timelines and expectations for the ramp-up of pump sales and revenue, which are crucial for financial forecasting and investor expectations.

Can you explain the path to a $50 million run rate in pumps and when it will translate to revenue? - Frank Takkinen

2025Q3: The real revenue ramp will start in the third and fourth quarter of 2026. - Roger Susi(CEO)

What is the expected pace of the ramp to $50 million in pump revenue? - Frank James Takkinen

2025Q2: Q1 bookings will be weak, but Q2 should see a strong booking and sales ramp-up, leading to over $100 million run rate by the end of 2026. - Roger Susi(CEO)

Contradiction Point 2

Gross Margin Sustainability

It involves differing expectations and explanations of the company's gross margin sustainability, which is a key metric for financial health and investor interest.

How did you maintain a 78% gross margin despite transition inefficiencies? Does this suggest potential for higher gross margins ahead? - Frank Takkinen

2025Q3: The 1% increase in gross margin was due to domestic revenue, not the transition. - Roger Susi(CEO)

Could the new pump's ASP increase gross margins? - Jason Hart Wittes

2025Q2: The higher ASP should contribute to a better gross margin. - Roger Susi(CEO)

Contradiction Point 3

Inventory Levels and Pricing Strategy

It involves inventory management and pricing strategies, which are critical for operational efficiency and financial performance.

What are current inventory levels for 3860 and 3870? Has 3860 pricing been discounted? - Kyle Bauser (ROTH Capital Partners)

2025Q3: No discounting on 3860 pricing. Current inventory levels are sufficient for the backlog, and no discounting was done. - Roger Susi(CEO)

What drove the strong growth in disposable revenue in Q1? - Frank Takkinen (Lake Street Capital Markets)

2025Q1: The growth in disposable revenue was driven by working down some of the backlog and striving to decrease lead times to meet customer demand. This effort played a part in the quarter's results. Going forward, disposable growth is expected to align with the growth in capital sales and pump utilization. - John Glenn(CFO)

Contradiction Point 4

Gross Margin Stability

It involves expectations regarding gross margin stability, which is a crucial financial indicator for investors and stakeholders.

Why did you maintain a 78% gross margin during the transition despite inefficiencies? Could this indicate higher gross margins in the future? - Frank Takkinen (Lake Street Capital Markets)

2025Q3: The 1% increase in gross margin was due to domestic revenue, not the transition. The ability to sustain this will depend on the balance between domestic and international sales. - Roger Susi(CEO)

What are the plans for international market entry for 3870? - Kyle Bauser (ROTH Capital Partners)

2025Q1: The change to the Blackwell GPU mask is complete without functional changes. Production is expected in Q4. - Jensen Huang(CEO)

Contradiction Point 5

Financial Forecasting and Operational Strategies

It involves differing expectations and explanations of the company's financial forecasting and operational strategies, which are critical for investor confidence and decision-making.

How do you maintain a 78% gross margin despite transition inefficiencies? Could this indicate potential for higher gross margins ahead? - Frank Takkinen(Lake Street Capital Markets)

2025Q3: The 1% increase in gross margin was due to domestic revenue, not the transition. The ability to sustain this will depend on the balance between domestic and international sales. - Roger Susi(CEO)

Will R&D decrease, and what are gross margins expected to be in 2025? - Jason Wittes(ROTH Capital Partners)

2024Q4: R&D spend is expected to be consistent, possibly with a slight uptick due to increased headcount. Gross margins will likely stay in the 76% to 77% range in 2025. - John Glenn(CFO)