Edap Tms (NASDAQ:EDAP) reported what management called a “transformative” 2025, driven by strong growth in its core high-intensity focused ultrasound (HIFU) business and record commercial performance for its Focal One platform. On the company’s fourth-quarter and year-end 2025 earnings call, executives highlighted accelerating adoption in the U.S., record system placements, and rising procedure volumes that are supporting growth in recurring revenue tied to utilization, disposables, and service.
Fourth-quarter momentum driven by record Focal One placements
CEO Ryan Rhodes said the fourth quarter was the strongest in the company’s history for HIFU revenue, up 34% year over year. The quarter included a record 15 Focal One placements worldwide, including 14 cash sales. The U.S. led results with 10 cash sales, the market’s highest quarterly total to date.
The company noted increasing penetration with key groups:
- With the University of Pennsylvania conversion, Focal One adoption reached 55% of National Comprehensive Cancer Network (NCCN) member institutions, according to management.
- The addition of University of Pittsburgh Medical Center brought penetration to 63% of Society of Urologic Oncology (SUO) group teaching hospitals in the U.S., the company said.
- After placements at two additional Cleveland Clinic hospitals in the U.S. during the quarter, there are now five Focal One systems within the global Cleveland Clinic hospital network.
Management also pointed to continued conversions from legacy HIFU technology. Rhodes said three major focal therapy programs converted to Focal One during the quarter, including the University of Pennsylvania, Penn State Health, and Lakewood Ranch Medical Center in Florida. He highlighted that Dr. Stephen Scionti, described as a high-volume focal therapy expert who has treated 2,000 prostate cancer patients over more than 20 years using a legacy HIFU platform, transitioned to the Focal One Eye platform.
International expansion and utilization trends
Outside the U.S., EDAP reported four cash sales in the quarter, including the company’s first Focal One system in India and its first in Argentina. The India sale went to Ruby Hall Clinic in Pune, while the Argentina sale was at the Argentine Institute of Diagnosis and Treatment in Buenos Aires. Rhodes said the Argentina placement expands EDAP’s South American footprint alongside existing sites in Brazil and Chile. The company also cited additional system sales in Italy and Spain as momentum builds across Southern Europe.
On utilization, Rhodes said U.S. Focal One procedure volumes reached the highest quarterly level, increasing 28% compared with the fourth quarter of 2024. He attributed growth to newly launched programs and increased patient demand in existing programs, and said the trend was consistent across large metropolitan areas and smaller communities.
Regulatory, reimbursement, and clinical development updates
Rhodes said EDAP received FDA clearance on Nov. 20 for the latest evolution of Focal One robotic HIFU, featuring advanced ultrasound imaging and streamlined treatment planning. He said the next-generation imaging engine provides real-time visualization and is intended to support future AI-driven algorithms to assist surgeons with tissue ablation visualization and treatment evaluation. Management also referenced the earlier 2025 launch of Focal One Eye.
On reimbursement, Rhodes said the environment remains favorable. CMS finalized the 2026 Outpatient Prospective Payment System rule awarding a national average facility payment of $9,671, a 4.6% increase versus 2025, effective Jan. 1. For physician payment, he said CMS set total facility RVUs at 26.33 for the HIFU procedure, and management stated the procedure provides 28% to 67% higher RVUs than alternative ablative treatments for prostate cancer in 2026 under the same setting and patient conditions.
Beyond prostate cancer, EDAP discussed clinical efforts in endometriosis and benign prostatic hyperplasia (BPH). Rhodes said Hôpital de la Croix-Rousse in Lyon, France is treating patients and hosting training programs for European endometriosis specialists, including physicians from Cleveland Clinic London who observed Focal One procedures. For BPH, he said EDAP’s combined Phase I/II study continues in Europe, and that a new clinical trial was initiated in South America in collaboration with the Mount Sinai Health System, with several patients treated in early March by local and U.S. BPH experts.
Financial results: HIFU growth offsets non-core declines
CFO Ken Mobeck said all 2025 figures were reported in euros, with an average euro-dollar exchange rate of 1.16 for the fourth quarter. He added that beginning with first-quarter 2026 results, EDAP will report in U.S. dollars as it transitions to a domestic issuer.
For full-year 2025, Mobeck said HIFU revenue increased 39% to EUR 33.1 million, compared with EUR 23.8 million in 2024. He attributed the increase to a 59% rise in the number of Focal One units sold and a 19% increase in treatment-driven revenue. Total revenue for 2025 was EUR 62.4 million, down 3% from EUR 64.1 million, as a 27% decline in non-core distribution and ESWL businesses offset HIFU growth.
For the fourth quarter, EDAP reported HIFU revenue of EUR 11.7 million, up 34% from EUR 8.8 million a year earlier. Total revenue was EUR 18.9 million, down 7% year over year due to a 38% decline in non-core distribution and ESWL revenue, partially offset by HIFU growth.
Gross margin for the quarter was EUR 8.1 million versus EUR 9.1 million in the prior-year period, with gross margin on net sales of 42.6% compared with 44.8% a year earlier. Mobeck said the decline was primarily driven by tariffs on imports of finished goods from France and an inventory reserve related to legacy parts; excluding those items, he said underlying gross margin performance was in line with the prior year.
Operating expenses increased to EUR 13.2 million from EUR 12.8 million, which management attributed to focused investments in the HIFU business. Operating loss widened to EUR 5.2 million from EUR 3.7 million. Net loss was EUR 8.2 million, or EUR 0.22 per share, compared with EUR 1.9 million, or EUR 0.05 per share, in the prior-year quarter. Mobeck said the increase was driven by a EUR 2.5 million non-cash charge related to warrants and interest expense on the European Investment Bank (EIB) Tranche A drawdown, plus a EUR 2 million negative currency impact versus the prior-year period.
On the balance sheet, inventory decreased to EUR 10.9 million at quarter end from EUR 13.8 million at the end of the third quarter, which the company attributed to high capital sales volume and disciplined inventory management. Cash and cash equivalents rose to EUR 17.4 million from EUR 10.6 million, primarily reflecting the EIB Tranche A drawdown.
2026 outlook: HIFU growth expected to continue
Management reiterated guidance previously announced in January. EDAP expects core HIFU revenue of $50 million to $54 million in 2026, representing 34% to 45% growth over 2025. Combined non-core revenue is expected to be $22 million to $26 million.
In Q&A, executives said they see strong pipelines in the U.S. and internationally and expect both capital sales and procedure growth to contribute, with capital sales leading on a percentage basis but procedure and service revenue increasing as a portion of HIFU revenue as the installed base grows. Mobeck said the installed base stands at 165 units and noted the company had 35 Focal One sales in 2025.
Management also discussed seasonality, stating it expects patterns consistent with prior years, with the fourth quarter the largest and the third quarter the lowest, and “a little less than 50%” of revenue in the first half and “a little more” in the second half. Regarding tariffs, Mobeck said EDAP manufactures in Lyon, France and that U.S. revenue is impacted when shipping finished goods into the U.S. He said the company budgeted about $2.5 million in tariffs in 2026 “to be conservative” and expects a lower-cost ultrasound engine to help offset some of the impact.
Rhodes said the company intends to continue leading with cash sales, adding that EDAP does not need to rely as much on time-based operational leases or “bridge to budget” arrangements. He also said pricing strategy has not changed at the beginning of 2026 following a price increase implemented last year with the launch of Focal One Eye.
About Edap Tms (NASDAQ:EDAP)
Edap Tms SA (NASDAQ: EDAP) is a Lyon, France–based medical device company that develops and markets noninvasive therapeutic systems for urological applications. The firm’s core focus lies in high-intensity focused ultrasound (HIFU) for localized prostate tissue ablation and extracorporeal shock-wave lithotripsy for kidney stone fragmentation. Edap Tms’s Ablatherm HIFU platform delivers targeted ultrasound energy to treat prostate cancer without incisions, while its Sonolith line offers pulse-focused shock waves designed to break down urinary calculi.
Since its founding in 1989, Edap Tms has pursued regulatory clearances in multiple markets, including CE marking in Europe and FDA clearance for its HIFU system in the United States.
