Spectral AI 2025 Q3 Earnings Widening Net Loss Despite Strong Cash Position

Spectral AI (MDAI) reported Q3 2025 results marked by a 136.2% increase in net losses and a 53.6% revenue decline, missing earnings expectations. The company reduced full-year revenue guidance to $18.5 million from $21.5 million, citing delays linked to the U.S. government shutdown and BARDA contract timing. Despite a 54% drop in research and development revenue, cash reserves held steady at $10.5 million, bolstered by a post-quarter financing round.

Revenue

Spectral AI’s Q3 revenue plummeted 53.6% year-over-year to $3.79 million, driven by a sharp decline in research and development revenue. This segment, the company’s sole revenue source, fell from $8.17 million in Q3 2024 to $3.79 million in Q3 2025, reflecting reduced reimbursements under the BARDA PBS contract post-FDA De Novo submission. The reduction in direct labor and clinical trial costs post-submission significantly impacted top-line performance, with no diversification into commercial sales of its DeepView™ System yet realized.

Earnings/Net Income

The company’s net loss widened to $3.55 million in Q3 2025, a 136.2% increase from $1.50 million a year earlier, with EPS deteriorating to -$0.13 from -$0.08. The loss expansion was attributed to declining revenue and higher general and administrative expenses, which rose to $5 million in Q3 2025. Despite improved cash flow and a 42.7% gross margin, the EPS remains a critical concern for investors.

Post-Earnings Price Action Review

Following the earnings report, Spectral AI’s stock price fluctuated sharply, gaining 0.61% in the latest trading day but tumbling 14.95% for the week and 34.26% month-to-date. The mixed performance reflects investor skepticism over the company’s near-term guidance and its ability to commercialize the DeepView™ System. While the $10.5 million cash position and $7.6 million post-quarter financing provide liquidity, the widening losses and delayed FDA approval remain key headwinds.

CEO Commentary

J. Michael DiMaio, Chairman, emphasized the company’s focus on commercialization milestones and operational efficiency, stating, “We continue to work toward bringing this innovative diagnostic device to market in the U.S. to improve patient outcomes.” Vince Capone, CFO, noted that 2026 will likely be a “down year” in revenue compared to 2025 but highlighted progress in FDA submissions and international market feedback.

Guidance

Spectral AI lowered FY 2025 revenue guidance to $18.5 million, citing delayed BARDA contract work and the U.S. government shutdown. For 2026, management expects “flat to slightly lower” revenue as it transitions to commercialization. Capone reiterated that 2027 and 2028 will be pivotal growth years, with the DeepView™ System’s commercial launch anticipated post-FDA clearance in H1 2026.

Additional News

1. FDA De Novo Submission: The company submitted its De Novo application in June 2025 and remains on track for H1 2026 approval, with no regulatory holdups reported.

2. Funding Activity: A $7.6 million registered direct offering in October 2025 bolstered liquidity, though the proceeds are not yet reflected in Q3 financials.

3. IP Transaction Update: The Spectral IP and SEM IP transaction is under SEC review, with an expected 2026 closure and financial impact.