Hyperfine (HYPR) Q3 2026 Earnings Call Transcript

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DATE

Monday, Nov. 9, 2026

CALL PARTICIPANTS

• President and Chief Executive Officer - Maria Sainz
• Chief Administrative Officer and Chief Financial Officer - Brett Hale

TAKEAWAYS

• Revenue -- $6.0 million, representing 73% year-over-year growth driven by organic contributions from hospital, office, and international verticals.
• Unit Sales -- 14 commercial systems, an increase of 75% year over year reflecting broad-based adoption across three commercial sectors.
• Gross Margin -- 56.7%, a record level supported by higher average selling prices, Model 2 product mix, and increased manufacturing scale.
• Operating Loss -- $7.3 million, an improvement of 19% year over year resulting from higher gross profit and a stable operating expense base.
• Net Cash Burn -- $5.6 million, a 29% sequential reduction marking the first quarter where revenue exceeded net cash consumption.
• Service Revenue -- $717,000, growing 31% year over year due to the continued expansion of the installed system base.
• Research and Development Expense -- $3.9 million, a 3% decrease year over year as the company realized benefits from its 2025 reorganization.
• Sales, General, and Administrative Expense -- $6.7 million, remaining flat year over year despite significant revenue growth during the same period.
• Net Loss -- $6.0 million or $0.06 per share, including a $1.5 million noncash gain from changes in warrant liability fair value.
• Cash and Cash Equivalents -- $37.9 million as of Sept. 30, 2026, with management projecting a cash runway into 2028.
• Year-to-Date Revenue -- $13.8 million, an increase of 66% compared to the first nine months of the previous year.
• Year-to-Date Unit Volume -- 36 systems, representing 64% growth compared to the prior-year period.
• Full Year 2026 Revenue Guidance -- $20 million to $22 million, representing approximately 55% growth at the midpoint of the range.
• Full Year 2026 Gross Margin Guidance -- 52.5% to 55%, with management raising the low end of the range due to durable margin gains.
• Full Year 2026 Net Cash Burn Guidance -- $26 million to $28 million, representing a 10% decline compared to the full year 2025 at the midpoint.
• Clinical Concordance -- 92%, based on the NEURO PMR study results identifying pathology in blinded reviews compared to conventional MRI.
• Patient Preference -- 4 to 1, with patients favoring portable MRI over high-field conventional MRI systems according to study data.
• Operating Leverage -- Revenue grew 53% sequentially while operating expenses increased less than 2% between the second and third quarters.
• Sequential Gross Margin Expansion -- 600 basis points, rising from 50.7% in the second quarter to 56.7% in the third quarter.
• Debt Facility Capacity -- $25 million, representing remaining potential financial flexibility subject to specific loan agreement conditions.

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RISKS

• Sainz stated, "The process with health systems takes longer because it involves regional, divisional or national approvals and procurement steps," noting that the first placement in a new system is typically the most involved.

SUMMARY

Hyperfine, Inc. (NASDAQ:HYPR) reported record third quarter results as the company transitions from a niche medical technology provider to a broad-based brain health and wellness platform. Management stated that the Swoop portable MR imaging system is expanding beyond critical care into emergency departments, hospital clinics, and neurology offices. Financial performance was characterized by substantial operating leverage, with record revenue and gross margins occurring alongside a largely stable operating expense base. The company is pursuing expanded clinical utility through a planned FDA submission for contrast imaging and is targeting international growth through new distribution agreements in the Middle East and Europe.

• Management completed enrollment in the Contrast PMR study and remains on track to submit a 510(k) application to the FDA by the end of 2026.
• The latest Optive AI software received CE and UKCA marking, introducing noise correction, guided scanning, and workflow improvements to international customers.
• Sainz indicated that revenue from the brain wellness and longevity vertical is anticipated to begin contributing in 2028 rather than 2027.
• The company expanded its global reach by signing an exclusive distribution agreement for Kuwait and the United Arab Emirates.
• The land-and-expand model in hospitals is gaining traction, with 70% of U.S. hospitals belonging to a health system or integrated delivery network.
• Management noted that service revenue grew 31% year over year, reflecting the expansion of the commercial installed base of Swoop systems.

INDUSTRY GLOSSARY

• Swoop System: The first FDA-cleared portable, ultra-low-field magnetic resonance imaging system for the brain.
• Model 2: The second-generation version of the Swoop system hardware and software.
• Optive AI: Proprietary artificial intelligence software used for noise correction and image quality improvement in portable MRI.
• 510(k): A premarket submission made to the FDA to demonstrate that a medical device is safe and effective by being substantially equivalent to a legally marketed device.
• CE Mark: A certification mark that indicates conformity with health, safety, and environmental protection standards for products sold within the European Economic Area.
• UKCA Mark: The United Kingdom Conformity Assessed marking used for goods being placed on the market in Great Britain.
• IDN: Integrated Delivery Network, a formal system of providers and sites of care that offers a full range of healthcare services to a particular geographic area.
• Concordance: The degree of agreement between two different diagnostic methods or tests.

Full Conference Call Transcript

Operator: Good afternoon, and welcome to Hyperfine's Third Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the call over to Webb Campbell from Gilmartin Group for introductory disclosures. You may begin.

Webb Campbell: Thank you for joining today's call. Earlier today, Hyperfine, Inc. released financial results for the quarter ended September 30, 2026. A copy of the press release is available on the company's website as well as sec.gov. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of the federal securities law and made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results or performance are forward-looking statements.

All forward-looking statements, including, without limitation, those relating to our operating trends and future financial performance, expense management, market opportunity, commercial and international expansion, regulatory approvals and product development are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our latest periodic filings with the Securities and Exchange Commission.

This conference call contains time-sensitive information and is accurate only as of today's live broadcast. Hyperfine, Inc. disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. With that, I will turn the call over to Maria Sainz, President and Chief Executive Officer.

Maria Sainz: Good afternoon, and thank you for joining us. On the call with me today is the Chief Administrative Officer and Chief Financial Officer, Brett Hale. The financial results in the third quarter were the strongest in Hyperfine's history. We delivered records across the P&L, revenue, gross profit and gross margin, along with the narrowest operating loss and our lowest quarterly net cash burn. This is not just a great quarter, it marks the beginning of a new trajectory. Revenue was a record $6 million, up 53% sequentially and 73% year-over-year. Gross margin was a record 56.7%. Net cash burn fell 29% sequentially to $5.6 million and for the first time, quarterly revenue exceeded net cash burn.

Brett will walk you through the details. I want to step back and reflect on where we are, who we are, the significant opportunity in front of us to advance brain health and drive meaningful long-term value for our shareholders. Hyperfine is transforming from our origins as a highly innovative niche medical technology company to our present and future as a broad-based medical and wellness platform with a vision to improve brain health globally. Over my more than 3 decades in health technology, I have witnessed the trends that have shaped this industry over time to improve the delivery of health solutions.

I have a strong conviction that the trends that are now shaping the future of health technology represent significant tailwinds for Hyperfine. First, any health tech innovation is now measured on both clinical and economic impact. The correlation between clinical and economic value for our Swoop system is strong. The Swoop system improves care while delivering compelling ROI, reducing cost of care and improving patient workflow. Second, AI plays an increasingly prominent role in health care decisions and delivery. AI robotics is leading the way. AI imaging is fast following. We believe the field needs a diagnostic platform like the Swoop system to realize the potential AI imaging represents in decentralizing and democratizing the field.

Without a hardware platform that renders brain imaging scalable and available broadly close to the community, AI imaging will not reach its full potential. And third, health care is expanding beyond medical use to wellness and prevention, serving both patients and consumers. An accessible brain imaging platform like the Swoop system enables the use of brain imaging at an accelerated pace in the emerging field of wellness, longevity and concierge brain health. We are seeing increasing interest in the Swoop system from memory clinics, from wellness, longevity and concierge practices, where accessible brain imaging can support the evaluation and follow-up of individuals over time.

We are building a fundamentally strong business with incredible opportunity and potential right in front of us. As we scale and drive revenue growth, margin expansion and operating leverage, we unlock an increasing number of opportunities for our core technology. We have built a solid proprietary position in miniaturized MRI with applications inside hospitals and across health systems in ICUs, EDs and clinics. We have expanded into outpatient care and neurology offices and globally through our distribution partners, and we are now driving an emerging and very large opportunity to also build a brain wellness business. We complement conventional MRI, and we enable the AI ecosystem to drive the scale it needs in AI imaging. This is the new Hyperfine.

Now turning to the execution that is fueling our success. Our third quarter revenue was driven organically by well-balanced contributions from all 3 business verticals. The hospital business remains our largest commercial vertical and an important source of validation of our unique technology and its clinical and economic value proposition. Over the past 5 quarters, the Swoop system has moved beyond niche use in critical care toward broader routine clinical use across ICUs and emergency departments with emerging use in hospital-based clinics, postoperative neurosurgical workflows and mobile deployments. Health systems are where the hospital opportunity gets bigger. Roughly 70% of U.S. hospitals belong to a health system or IDN.

In the third quarter, we had several new and follow-on orders and placements from health systems. The process with health systems takes longer because it involves regional, divisional or national approvals and procurement steps. And the first placement in a new health system is usually the most involved one. After the first placement, follow-on orders build on what is already in place, contracting, approvals, implementation and clinical champions. We started seeing traction in this segment with the launch of Model 2, and it has now become a meaningful component of our revenue. As we enter the first full annual capital planning cycle since Model 2 launch, we believe health systems represent a growing opportunity.

Use of the Swoop system in hospitals continues to increase as adoption spreads from the ICU alone to the ICU, ED and other sites of care. Each placement drives utilization and generates clinical and economic data. Together, they create clinical and executive champions and those champions drive follow-on orders across the system. That is the land-and-expand model that we are building in hospitals. In the office, we see continued adoption across a broadening range of settings from general neurology and memory clinics to the initial concierge practices as well as the strong use of Swoop system in existing installations. This quarter, the NEURO PMR study was published in the peer-reviewed Journal of Neuroimaging.

As a reminder of the results, in a blinded review, portable MRI showed 92% concordance in identifying pathology with conventional MRI and 98%, including clinical history, and patients prefer portable MRI 4:1. An important milestone for both our office and hospital businesses in the third quarter was the completion of enrollment in the Contrast PMR study. We remain on track to submit a 510(k) application to the FDA by year-end 2026. Contrast broadens the clinical utility of the Swoop system in hospitals and offices and in outpatient settings, contrast brain MRI is reimbursed under a dedicated CPT code 70553.

Published clinical evidence, strong patient preference and a path to contrast imaging with established reimbursement are building the case for brain MRI in the neurology office. Beyond our U.S. hospital and office opportunities, we have also built a solid international foundation. We launched Model 2 in Europe and the U.K. midyear following CE and UKCA marking, and we have sold Model 2 into 4 international markets with very positive feedback from initial users. In October, our latest Optive AI software also received CE and UKCA marking, bringing its noise correction and workflow improvements to customers in Europe and the U.K. We also recently signed an exclusive distribution agreement for Kuwait and UAE, extending our reach into the Middle East markets.

Our distributor model allows us to expand globally without a proportionate increase in operating expense. In summary, beyond the strong headline numbers, the Hyperfine team delivered in every part of our business in the third quarter. We launched the latest Optive AI software, published NEURO PMR, completed contrast PMR enrollment, launched Model 2 in international markets and expanded our distribution into the Middle East. With that, I will turn the call over to Brett to review our financial performance and guidance.

Brett Hale: Thank you, Maria. The third quarter delivered strong performance from revenue to cash burn reduction. I will walk through the third quarter results and how they support our full year guidance and the long-term trajectory of the business. These results demonstrate the operating leverage in our business model. Revenue increased 53% sequentially, while operating expenses increased less than 2%. Compared with the second quarter, record revenue and record gross margin generated $1.4 million of additional gross profit against just $0.2 million of additional operating expense. That translated into a narrower operating loss alongside a 29% reduction in net cash burn. Turning to the details.

Revenue for the third quarter of 2026 was a record $6.0 million compared to $3.4 million in the third quarter of 2025, representing an increase of $2.5 million or 73% year-over-year and an increase of 53% from the second quarter of 2026. In the third quarter, we sold 14 units compared to 8 units in the prior year period, an increase of 75%. Third quarter growth reflected contributions from all 3 commercial verticals: U.S. hospital, U.S. office and international. As Maria described, commercial momentum included new and follow-on health system orders, expansion across hospital sites of care, adoption in neurology offices and initial concierge practices and the international rollout of Model 2.

This growth was organic and broad-based with no onetime items. Revenue growth reflected higher unit sales and a record average selling price. Service revenue also increased 31% year-over-year, reflecting continued expansion of our installed base. Gross profit for the third quarter of 2026 was a record $3.4 million compared to $1.8 million in the third quarter of 2025, an increase of $1.5 million or 83%. Gross margin was a record 56.7% compared to 53.8% in the prior year period and 50.7% in the second quarter. That represents approximately 300 basis points of year-over-year expansion and 600 basis points of sequential expansion. This is our fifth consecutive quarter with gross margin above 50%.

Higher average selling prices, Model 2 mix and increased scale supported margin improvement. R&D expenses for the third quarter of 2026 were $3.9 million compared to $4.0 million in the third quarter of 2025, a decrease of 3%. We continue to realize the benefits of our 2025 reorganization while maintaining our investments in priority software and clinical programs. Those investments supported the latest Optive AI software release and completion of our enrollment in the Contrast PMR study, tangible progress in improving the system today and pursuing expanded clinical utility. Sales, general and administrative expenses for the third quarter of 2026 were $6.7 million, flat compared to the third quarter of 2025.

Within that total, sales and marketing expenses increased 4% year-over-year, while revenue grew 73% over the same period. Our lean and shared U.S. sales organization serves hospital and office markets with complementary sales cycles and our distribution partners extend our reach internationally. Follow-on health system orders build on existing contracts, approvals, implementations and clinical and executive champions, so they typically require less time and selling efforts. This commercial model allows us to grow revenue significantly faster than sales and marketing expenses. Moving down the P&L.

Operating loss for the third quarter of 2026 was $7.3 million, our narrowest quarterly operating loss and an improvement of 19% compared to the third quarter of 2025 and 14% compared to the second quarter of 2026. These improvements reflected higher gross profit with a largely stable operating expense base. Net loss for the third quarter of 2026 was $6.0 million, equating to a net loss of $0.06 per share compared to a net loss of $11.0 million or $0.14 per share in the third quarter of 2025.

The third quarter of 2026 net loss included a $1.5 million noncash gain from the change in fair value of warrant liabilities compared to a $2.3 million noncash loss in the prior year period. Net cash burn in the third quarter was $5.6 million compared to $5.9 million in the third quarter of 2025, an improvement of 6% year-over-year and 29% sequentially. Net cash burn has declined every quarter this year, from $8.8 million in the first quarter to $7.9 million in the second quarter to $5.6 million in the third, our lowest quarterly net cash burn.

For the first time, quarterly revenue exceeded quarterly net cash burn, a meaningful milestone in building a more capital-efficient business with stronger commercial performance and lower cash consumption. As of September 30, 2026, we had $37.9 million in cash and cash equivalents on our balance sheet with no capital raise since June 30, 2026. Taken together, the third quarter demonstrates our ability to grow revenue and gross profit without a comparable increase in spending while reducing cash burn. Our progress supports our confidence in the full year outlook. Turning to 2026 guidance. We are reaffirming our full year revenue and net cash burn guidance, and we are raising the low end of our gross margin guidance.

Revenue for the first 9 months of 2026 was $13.8 million, up 66% year-over-year. We sold 36 units, up 64% year-over-year, and unit sales have grown each quarter this year. We reaffirm full year revenue guidance of $20 million to $22 million, representing approximately 55% growth at the midpoint. Our outlook builds on the contributions from all 3 commercial verticals and several identifiable tailwinds. First, in the hospital and IDN, we see opportunities for new and follow-on orders and expansion across sites of care, supported by the first full annual capital planning cycle since the Model 2 launch. Second, in the office, continued adoption, strong utilization and early demand from concierge practices expands our opportunity.

Third, internationally, Model 2 is gaining traction as the rollout continues. Year-to-date gross margin was 53.3%, and we are raising the low end of our full year gross margin guidance, narrowing the range from 50% to 55% to 52.5% to 55%, reflecting our confidence in the durability of these margin gains. Our strong clinical and economic value proposition supports healthy average selling prices, while Model 2 mix and increasing scale have supported margin improvement. We also reaffirmed our full year 2026 net cash burn guidance of $26 million to $28 million, representing approximately a 10% year-over-year decline at the midpoint.

We continue to execute against our operating plan and reaffirm our expected cash runway into 2028, assuming no additional financing, including no future debt draws. Our $37.9 million in cash and cash equivalents as of September 30, 2026, our improved cash burn and identifiable commercial growth drivers underpin that outlook. We believe this positions us well to fund our commercial and product priorities while maintaining discipline in spending and capital deployment. Our debt facility provides potential additional financial flexibility with up to $25 million of remaining capacity subject to the conditions in our loan agreement. In summary, the third quarter delivered record revenue and gross margin. That commercial progress is translating into operating leverage and lower cash burn.

Our outlook, including a raised gross margin floor reflects the progress we have delivered and the identifiable opportunities ahead. With that, I will turn the call back to Maria for closing comments.

Maria Sainz: Thank you, Brett. The Swoop system began as a critical care tool. Today, it is used in EDs, ICUs, hospital clinics, neurology offices with emerging use in concierge clinics, operating rooms and mobile units. The challenges with patient progress in EDs and the growing issue of patient boarding made the front page in the Wall Street Journal on Friday. The problems we solve are very real and very close to all of us. With MRI imaging on a platform that goes where patients are, we have the opportunity to change how brain care is delivered from the health system to the community.

Looking ahead, we're focused on driving Swoop adoption, converting health system opportunities, submitting our contrast 510(k) by year-end, scaling Model 2 internationally and exploring how best to advance the emerging brain health and wellness opportunity while continuing to drive operating leverage. This is the new Hyperfine. With that, operator, please open the line for questions.

Operator: [Operator Instructions] Our first question comes from Marie Thibault with BTIG.

Marie Thibault: Congrats on a nice quarter and nice OpEx control quarter as well. I wanted to hear a little bit more about learnings from some of these health systems and IDNs, some of the placements that you've got there. You've said you've had some first orders. You've also had some follow-on orders. So I'd love to hear any trends, any learnings in how long it takes to go from a first order to follow-on orders? What are some steps maybe some of these customers like to see? How your sales reps are being trained to handle this as well? Just any more detail on that since it does seem like such a nice opportunity.

Maria Sainz: Sure. Thank you, Marie. So it is an involved process. The first one, as I said in the prepared remarks, takes a little bit longer than you would expect just because different systems operate at a -- with the structures that call for either regional processes, divisional processes or national processes. And that is for the same procurement steps that we usually undergo in any hospital deployment as a connected device with a multiyear contract. So legal, cybersecurity, more often as well, we see AI committees or AI vetting steps.

So in the quarter, so if I go back to really the introduction of Model 2, that was a little bit of the beginning of this interest from health systems and IDNs. And I think we've been quite open about the CHRISTUS experiences. So CHRISTUS was one of our very first deployments. We've seen it's a regional IDN or a regional health system. And we have seen follow-ons probably almost every quarter since then. Others that are national probably are going to take longer. So probably 2 to 3 quarters to go from the first one. only because they really want to see the results of implementation and the initial data to substantiate the value proposition.

So how much shorter the discharge time is, how much quicker do patients get to the MRI. But like with any large infrastructure kind of system, you do need to find the right champions that come and look at the data and then they go ahead and let everybody else sort of tell or tell everybody else that they are -- that the Swoop is delivering to the promise and that they can proceed. So there's a little bit of that gating, I would say, 2 to 3 quarters on anything that is a big, big national system and some others that are regional, a little bit more agile, could go a little bit faster.

We do see the use follow the traditional way we've looked at our use. So the no-brainer site of care is the critical care because you do reduce risk, you do reduce cost. The second one that is gaining a lot of traction now is the ED. And I would argue then the same thing follows in terms of the emergence of either the hospital clinics or the operating rooms.

Marie Thibault: Okay. Wow, that's a lot of great detail. And as we get a little closer to the contrast indication, I want to make sure I understand the impact of that. Certainly, it would lead to more utilization, I would think. But should we also look for -- is this a tailwind for system placements, system orders? Is this something people are holding on for, holding out for? Help us understand a little bit more how this might impact unit count and unit adoption.

Maria Sainz: Sure. So as I said, it really plays out well for us, both in the hospital and in the office vertical. It really creates an opportunity to use it on label more often and for more brain scans since there is a relatively large percentage of brain scans that have contrast. In the hospital, it doesn't have as much of a reimbursement tailwind, but it does have a site of care tailwind. The operating room is an environment where most of the scans for the brain utilize contrast because often enough, we're talking about tumor resection, which is one of the uses where the brain MRI requires or is ideal with contrast.

So I anticipate that it's a bit of a tailwind getting us into the operating room use, the perioperative use in the operating room. It is definitely a tailwind with some offices where the ROI and the number of cases that would actually give them the financial envelope to think about Swoop is enhanced significantly with contrast. So I would argue once we have contrast, we're going to go back to some of the offices where the opportunity may have fallen shy of being big enough for them with [ non-brain ] only and actually reactivate those prospective customers again with the contrast indication and the opportunity to use the 70553 reimbursement code.

So we're still thinking it's more like a -- I mean, second quarter, midyear, I mean, we're still on track to submit by the end of this year. And remember, it is a traditional 510(k), so statutorily 90 days. So give and take some questions with the FDA, probably sometime in the second quarter to the midyear point.

Operator: Our next question comes from Frank Takkinen with Lake Street Capital Markets.

Frank Takkinen: Congratulations on all the progress. I was hoping to start with one on the guidance reiteration. Clearly, you guys have great momentum in the business and Q3 was a record. I think historically, we have seen Q4 step up, which would imply kind of low end of the guidance is approximately flat quarter-over-quarter. Why not maybe bring that guide up a little bit from where we were just under the premise of regular seasonality into year-end?

Brett Hale: Frank, this is Brett. I'll take that. So you're correct. We had a very strong Q3 with a significant step-up from where we were in the first half of the year. The $20 million to $22 million range, we felt comfortable with given that we are capital equipment and our deals are significantly large in scale. So at this stage, you're right, we're at $13.8 million of revenue year-to-date. We felt good that the $20 million to $22 million was still a good landing zone given the business, the opportunities and the visibility.

Maria Sainz: Yes. The only thing -- Frank, the only thing I would add is remember that in Q4 of last year, we had a multiple unit system-wide upgrade that drove that quarter with a onetime effect, a little bit above what was really organic and run rate. So we have seen sometimes a little bit of that capital availability. But historically, we haven't really had that much of a Q4 effect like other companies. And definitely, last year, that $5.3 million in Q4 had the onetime effect of a multiunit system-wide upgrade from Model 1 to Model 2.

Brett Hale: Yes. I guess the last thing I'll comment on that is we've had a nice steady progression of our unit volume increase throughout the balance of this year. So we've added about 2 units every quarter this calendar year for each quarter sequentially. And so we still just see nice continued growth in the business, driven by the 3 business verticals on a very strong predictable cadence.

Frank Takkinen: Got it. That's very helpful. And then maybe a 2-part question, both related, maybe half for Maria, half for Brett. The -- as it relates to the office opportunity, when might it make sense to invest into that commercial organization a little bit more aggressively and bring on a few more heads there? And then in light of that and OpEx in general, Brett, maybe initial read on whether this OpEx structure can stay kind of flat on a quarter-over-quarter basis going forward, and we should continue to see leverage? Or does that start to trend a little bit higher with some of these investments that could occur?

Maria Sainz: Okay. So I'll start with my half. Great point and good question. We are in the process of really sort of doing the lessons learned from 2026 as we start putting sort of pen to paper on a 2027 plan. And one of the discussions is how do we optimize our selling capacity in the 2 sort of call points and which way is it going to be better for us going forward. So we are contemplating different things, and we'll definitely have to come to a final decision on those here relatively soon so that we kick off 2027 with what I would call an optimal structure.

Under all of those circumstances, we do not expect anything beyond a modest investment in commercial sort of bandwidth and capacity, but the structure of that is a really good question. Remember, we're also talking a little bit more now about this developing opportunity in the field of longevity and wellness, which is quite adjacent to the office space and a little bit further removed from the hospital sort of medical vertical. It is incremental, but it has more affinity to the office. So that consideration and how to continue to be exploring that from the field perspective is one of the considerations as we balance the opportunity to do more dedicated resources or continue to use one team.

But in all cases, and I've said it before, none of our plans would call for some kind of doubling or tripling of our sales capacity, which I think dovetails well into the second half of your question.

Brett Hale: Yes. We've been very committed to making sure that we're running the business as efficiently as possible. As we highlighted in this earnings, we've seen a tremendous amount of operating leverage. So driving revenue, driving gross margin without having to drive a significant increase in spending. That will continue for the foreseeable future. We've been very, we'll call it, more flattish on our G&A and our R&D, R&D being tied to those initiatives that drive top line growth. And then as Maria mentioned, the sales and marketing side, we will make appropriate but modest investments to continue to optimize the opportunities in front of us.

Operator: Your next question comes from the line of Yuan Zhi with B. Riley.

Yuan Zhi: Maybe as a follow-up question to Maria's earlier question, if customers don't jump on the order immediately, what was the pushback or factors delaying that? Is it lack of technicians or system integration or something else?

Maria Sainz: Okay. Sorry, Yuan, the line was a little bit difficult to understand. You were saying if customers do not -- what was the hurdle? But I didn't understand if...

Yuan Zhi: Yes. Sorry about that. So if customers don't jump on the order immediately, do not buy your Swoop system immediately, what was the pushback or factors delaying that?

Maria Sainz: Okay. No, great question. So I mean, at a very high level, I would tell you if somebody doesn't jump on it, it's not a no, it's a not now. And many, many times, it's a matter of the process. So if it is a health system, it's some of this process that I was referring to before, which is relatively involved with procurement and legal reviews and cybersecurity assessments and AI assessments. In other cases, it may well be that they are talking about evaluating the system now to put it into next year capital budget. So it's not now, but it will happen next year.

So that budget cycle that we are now part of makes us do some selling today for business that will happen next year, just again because they want to put it solidly into the budget for next year. So we don't get the nos. We get the not now or we need to wait until we have the capital funding available, and that's pretty much across the country if it happens. The ROI continues to be very compelling. Sorry, I would just add that it's not really an economic issue other than the capital funding may not have been approved.

But when the money is available from a capital budget perspective, the ROI in that year to 1.5 years makes it very, very attractive and compelling, and we still see some folks doing things, I would argue, a little bit of process or not waiting for some process to also accelerate the Swoop system purchases. So there are some that need more process and there are some others that are just willing to do ad hoc approvals without waiting for a committee meeting and things of that nature just because of how compelling it is.

Yuan Zhi: Got it. Got it. And then on the 3Q revenue, can you maybe talk about which market were the main drivers behind that? Any market grows faster than the others? And can you maybe comment on the unit split across hospital, neurology office and international opportunities?

Brett Hale: Thanks, Yuan. This is Brett. I'll cover that. So we had mentioned in our prepared remarks that Q3 was driven by a broad adoption across all the business verticals. So as we mentioned, we have seen new hospital placements, follow-on hospital placements, placements in the offices and some of the emerging concierge as well as international. And as a reminder, we launched international V2, Model 2 international markets in the middle of the year. So we felt really good about the breadth of the contributions from each one of those. All of that also resulted in a very healthy ASP across the board.

So without getting into the specifics of them, it really was driven by all of the growth drivers that we had outlined and feel really good about their contributions across the board.

Yuan Zhi: Got it. And maybe a follow-up to that. For the 4Q upcoming, how do you view the drivers across different markets? Or do you see that across all the 3, 4 markets, they are all growing as you expected?

Maria Sainz: We expect, I mean, this very balanced contribution in Q3 is something that we believe continues into future quarters because all of the verticals or the markets have their own unique catalysts that allow them to continue to be moving in the right direction. So in the hospital system, we've mentioned sort of the continuation of the trajectory with health systems and just additional also targets with the adoption into the EDs with adoption now into new sites of care in offices, even before contrast, which will intervene more in the second quarter, mid-next year time frame, we're seeing more offices sort of jump on the wagon of Swoop because it is an attractive thing to bring into their practice.

And many are also looking at extending into concierge practice where a brain scan is an important element of it. And then we still have, although we are launched, the pace at which different countries through our distributors launch locally is their own pace. So we have more markets that we haven't yet launched into international that will contribute in Q4 and in future quarters. So it's across all 3, very balanced.

Operator: Your next question comes from Alex Nowak with Lucid Capital Markets.

Alexander Nowak: Okay. I wanted to follow up to Frank's question, thinking about the plan for next year. The 2026, as I understand it here, was the first full year of the capital cycle with Swoop Model 2 and 2027 is going to be the second. Can you talk about the visibility of the pipeline within the U.S. hospitals and U.S. clinics? And if you really had to compare, how is the funnel building for next year if you thought about where you were sitting the same time last year?

Maria Sainz: Alex, thanks for the question. A year, I guess, 5 quarters of experience into Model 2, my confidence is much stronger now around the pipeline, the ability to close. I think somebody before asked me and maybe I didn't address it before, we've spent a lot of time with our team around this executive selling and this ability to sell into health systems and IDNs. So that clearly is a channel within the hospital system that is materializing more now than a year ago to your specific question. I also feel really good about contrast as a factor, definitely in the second half of next year, if we think about a Q2 clearance or midyear clearance.

And then international, we are starting to see literally 1 quarter into the launch, the same effect in terms of the market response that we saw in the U.S. about 5 quarters ago. So I see tailwinds on each of the 3 verticals that really make quite a difference a year into the company with the Model 2 technology in our hands and a more diversified portfolio of core points and channels to sell into.

Alexander Nowak: That's great. Is the gross margin of upper 50%, 57% this quarter, so let's say, 55% to 60%. Is that a sustainable base heading into 2027? Or were there a couple of onetime items or just the U.S. hospital mix that really helped this quarter and maybe we see more like a mid-50s for next year?

Brett Hale: Thanks, Alex. I'll take that. This is Brett. So we reiterated the guidance for 2026 -- excuse me, we've mirrored the guidance for 2026 for our gross margin to 52.5% to 55%. So we feel really good about where things will land regarding gross margin on an annual basis. I guess I will highlight, we did have a record ASP this quarter that was driven by all the breadth of the business. We'll have more details on 2027 as we get into early 2027. But the one thing, I guess, I would highlight is we've demonstrated just really strong gross margin profile. This has been the fifth straight quarter above 50%.

We narrowed to the upper end of the guidance here in this one. So definitely, we feel good about the business from a gross margin expansion. We'll have more color, obviously, on the details of 2027 in early 2027.

Maria Sainz: I was going to just add that we increased our pricing in the U.S. first at the launch of Model 2 and then again at the beginning of 2026. Also the introduction through our distributors of Model 2 in international markets came with a slight price improvement, transfer price in that case. So -- and again, all of that is because the ROI and the opportunity for the economic impact of this technology is very, very real as we run sort of the different models and calculators in all sites of care. So I don't think that there's anything here that is a onetime pricing.

It's in general, an improvement in pricing and the fact that pricing is very well substantiated by the value proposition economically, not only clinically, but economically of the product, which translates into dollars and cents very quickly with the time it takes to get to the MRI, the faster discharge of the patients, the no admissions for things like observation and things of that nature, which are really punitive to the hospital system in the U.S.

Alexander Nowak: Okay. Good. That's great. And then I'm just going to throw one more out at you. We've talked a little bit about the potential of Swoop in Model 2 and I think the broader Hyperfine within this category of brain health and longevity markets. I just want to know where do you think this vertical can really go over the next few years? And what sort of new products, techniques, software, et cetera, do you really need to develop at the broader Hyperfine level to really tap into this fourth vertical?

Maria Sainz: Great question. So it's definitely a very exciting opportunity. I wouldn't really bank on anything translating into actual revenue into '27, but more into '28 and beyond. The operating assumption given our learnings in the market is that we use the hardware and the scanner pretty much as is. And we work on a way to translate our images into something that is a little bit more consumer-facing. So something like a patient-facing reporting. So something that is more of an AI software cloud kind of development, which intrinsically is relatively light lift. So we're not talking about a new coil, a new scanner, new sequences.

We're talking about modifications to sequences and then really, again, AI and cloud development to make it real in the delivery of an offering that is still mobile, portable, brain MRI, but with less of a radiology angle and more of a consumer angle. We're dedicating enough effort to stay close to how that base is developing. So we have some people that are really working on it from a market research, a product market fit and what needs to happen. And it will always be incremental to what I'm going to label our medical business in neurology offices and in hospitals. But I do see this starting to pan out more in '28 and beyond.

So not years away, but also not just next year.

Operator: And with that, there are no further questions in queue. This will conclude our question-and-answer session. I'll turn the call back over to Maria for closing remarks.

Maria Sainz: Thanks, everyone, for listening in today. We look forward to continuing to update you guys on our further progress as the quarters evolve, and have a great afternoon.

Operator: This concludes today'searnings call You may now disconnect.

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