HeartFlow, Inc. (HTFL) Earnings Call Transcript & Summary

Good afternoon, everyone, and thanks for joining us for the HeartFlow third quarter 2026 earnings conference call. With me today are John Farquhar, HeartFlow's President and Chief Executive Officer, and Vikram Verghese, our Chief Financial Officer. On today's call, we'll take you through how we performed in Q3, update you on commercial momentum, our innovation pipeline, and clinical programs, and give financial guidance. After that, we'll hold a live Q&A session. The earnings release that goes with today's discussion is posted on our Investor Relations website at ir.heartflow.com. On this call, we'll refer to certain non-GAAP financial measures. You can find reconciliations to the most comparable GAAP figures in today's earnings release. I'd like to remind everyone that certain statements made on this call are forward-looking within the meaning of federal securities laws. Such statements rest on management's current expectations and beliefs, carry risks and uncertainties, and actual results may differ materially. Please note that both this live call and a digital replay will be available shortly after the call concludes. With that, I'll now turn the call over to John Farquhar, our CEO.

Thanks for being with us. For HeartFlow, Q3 was yet another exceptional quarter. Momentum from the first half carried into the second at a faster pace, and the business's performance leaves me extremely gratified. Our mission—establishing the HeartFlow AI platform as the new standard of care for detecting, diagnosing, managing, and treating coronary artery disease—continues to see excellent progress. Year-over-year revenue growth accelerated for a third quarter in a row, and we came in above our expectations—a testament to our growing category leadership, the strength of our platform, and a robust CCTA market. Once more I want to thank the HeartFlow team for superb execution and their commitment to the patients we serve. Their work is reflected directly in our results. Total revenue for the third quarter reached $72.9 million, a 57% increase year-over-year, while U.S. revenue rose 60%—our fastest U.S. growth in 11 quarters. Four factors drove the quarter. First, PLAC adoption kept accelerating. Second, FFR-CT utilization stayed durable across our existing accounts. Third, new account additions were strong once again, and the 340 accounts we added in 2025—our largest cohort ever—kept ramping as planned. And finally, the CCTA market continued growing rapidly, fueled by guidelines, reimbursement, and physician demand. With only 11% penetration of the non-invasive testing market, CCTA has a long runway ahead. The strength of our performance through the first nine months gives us confidence to raise our full-year outlook once more. We're lifting our total revenue outlook to $262 million to $264 million, up 49% to 50% year-over-year. Our PLAC revenue outlook rises to $36 million to $37 million, and we now expect roughly 1,300 PLAC-activated accounts by year-end. Further down the P&L, we're raising non-GAAP gross margin guidance to approximately 82.5%, driven by a richer mix of high-margin PLAC revenue, volume leverage, and continued AI efficiencies. The midpoint of our revenue guidance implies non-GAAP gross profit growth of nearly 60% year-over-year, outpacing revenue growth; we remain confident in our mid-term non-GAAP gross margin target of 85%. Accelerating top-line growth, expanding gross margins, and disciplined operational investment give us even greater confidence in reaching our mid-term profitability goals. Let me share a few quarter highlights, beginning with commercial adoption. First, our category-leading installed base keeps expanding. We posted another strong quarter of new account additions, and each new account enlarges the base from which we drive broader platform utilization. Given the strength of our funnel, we now expect new account activations in 2026 to exceed the 340 we added in 2025. Turning now to PLAC, we delivered another outstanding quarter with continued momentum across account activations, physician utilization, and payer coverage. Account activations were strong, driven by leverage of our installed base and high demand for our market-leading plaque analysis. Physician utilization is expanding as well. Doctors are going past FFR-CT patients and applying plaque to a larger portion of their CCTAs, and that is precisely what we anticipated. Greater plaque use represents a significant and lasting tailwind for the company. Payer coverage keeps expanding, and plaque is now reimbursed for roughly 82% of U.S. lives. Turning to FFR-CT, I am happy to report that demand from physicians and utilization both remain robust and lasting. Our 2025 cohort keeps performing, and utilization from the 2026 cohort has been strong across the first nine months of this year. FFR-CT continues to be a potent growth engine for us; it rests on a deep body of clinical evidence, above all four randomized controlled trials, and it stands apart through lesion-specific precision, having been prospectively validated against the invasive gold standard of FFR. This clinical evidence and product differentiation leave me very confident that FFR-CT will keep delivering strong results. We also advanced well in reinforcing our platform further through the ongoing rollout of PCI Navigator, our distinctive offering that supports pre-procedural, CT-guided PCI planning. Navigator is the first and only PCI planning tool constructed on prospectively validated FFR-CT plaque, which supplies interventional cardiologists with the anatomy, plaque, and physiology required to plan every procedure before they enter the cath lab. In late October at TCT, together with the P4 RCT readout, we disclosed a collaboration with Boston Scientific aimed at advancing CT-guided PCI planning; we see this as additional validation of the CT-first plus HeartFlow pathway, and it should speed awareness among interventional cardiology of Navigator's clinical benefits. I am very confident Navigator will embed HeartFlow still deeper within our accounts and help make interventional cardiologists strong advocates for CT plus HeartFlow. Our robust results in plaque and FFR-CT likewise mirror the distinctive strength of the HeartFlow AI platform. Caring for a CAD patient calls for coordination among the referring physician, the CT reader, and the interventionist. Our physicians coordinate along the care pathway, and they expect the same of their technology. Fragmented point solutions cannot work at scale. Our AI platform can. It offers a complete solution to detect, diagnose, manage, and treat patients. At the front end of our pathway, our roadmap analysis boosts reading efficiency, lowers variability, and arrives automatically at our customer's workstation for every patient who receives a CCTA scan. Since it is present on all scans, regardless of stenosis or disease level, it acts as the launchpad for our reimbursed plaque and FFR-CT analyses, which then deliver distinct, complementary insights for diagnosing and managing disease. PCI Navigator now carries our AI precision into the cath lab, assisting interventional cardiologists in completing the care pathway with precision. From the first scan through treatment planning, the HeartFlow AI platform delivers a complete solution for CAD. In addition to our strong commercial momentum, our clinical evidence base keeps expanding, with significant new data reinforcing the case for HeartFlow as the new standard of care. Let me point to four recent readouts. To start, at AHA in November, we shared one-year results from a propensity-matched analysis of our prospective DECIDE registry, which includes over 6,000 patients. Those whose care involved HeartFlow plaque analysis experienced 34% fewer major CVD events and half the rate of heart attack at one year versus those managed with CCTA alone. By 90 days, 50% of patients hit target LDL-C, compared with only 35% under CCTA alone, and those gains held up through one year. These one-year findings show that HeartFlow plaque analysis gives clinicians the objective outcomes data they need to optimize preventative care earlier and more precisely, while significantly lowering major CVD events and heart attacks versus CCTA alone. With the DECIDE one-year outcomes, HeartFlow plaque analysis becomes the first and only plaque tool backed by prospective outcomes data, another key differentiator and tailwind for plaque adoption; also at TCT, the P4 study, the only randomized trial of CT-guided PCI planning, was presented, and its results were published at the same time in the New England Journal of Medicine. P4 compared CT-guided PCI planning enabled by HeartFlow against the gold standard of IVUS-guided planning. P4 hit its primary endpoint. CT-guided PCI matched gold standard IVUS on one-year target vessel failure rate. CT guidance also reduced median procedure time by 27%, used roughly 12% less contrast, and more than doubled the use of advanced calcium modification tools such as IVL.

Simply stated, P4 showed that CT-guided PCI planning can improve how efficiently and precisely PCI is performed, without any downside in outcomes. At TCT we also presented data from our Navigator PCI Registry, which, in real-world U.S. settings, assessed how PCI procedures changed when PCI Navigator was provided compared with standard planning. Using Navigator for CT-guided planning changed the procedural plan for about 70% of patients. Crucially, anatomy, plaque, and physiology each contributed to those plan changes, and Navigator is the only tool that brings all three together. When you put those two studies together, PCI Navigator gains a clinical evidence base that nothing else can match. In our view, these results further solidify both the CT-first pathway and HeartFlow as a platform as an emerging standard of care, and they set the stage for a wider rollout of Navigator in 2027. On top of that, our FFR-CT evidence base became even stronger in the third quarter. FUSION — an independent randomized controlled trial funded by the Dutch government — read out at ESC in August and became the fourth randomized controlled trial supporting FFR-CT use. Now, looking ahead, as we've said before, our third wave of growth is moving into the high-risk asymptomatic market. That's an opportunity of roughly $6 billion, bringing our total U.S. That brings the total addressable market to roughly eleven billion dollars. Three randomized controlled trials have been set up by us to produce the evidence needed for broadening plaque use across three high-risk asymptomatic populations. Refine CAC — the trial we are running for patients who have coronary artery calcium, a three billion dollar opportunity — along with REWRITE-CAD, our trial for patients with prior MI or PCI, a one billion dollar opportunity, are each expected to begin enrollment in Q4 of 2026. Evolve Plaque, our serial plaque study conducted with Amgen in patients with known plaque, represents a two billion dollar opportunity and is expected to begin enrolling in the first quarter of 2027. Our clinical objective is simple: find and quantify coronary disease sooner, and equip doctors with what they need to step in before a cardiac event occurs. High-risk asymptomatic patients carry major clinical needs and drive considerable healthcare spending. We think favorable results on the primary endpoint of the trials could back broader coverage under the plaque LCD already in place. Two of the three trials are on the verge of enrolling, and the Amgen study is expected to begin early in 2027, so we're moving briskly toward this coming growth phase. Also worth mentioning: moving into the high-risk asymptomatic market is strongly synergistic. It draws on the plaque technology we already have, builds on our current physician base, and will be sold through the sales channel we already use. To wrap up, the third-quarter numbers mark one more solid advance as we work toward setting a new care standard and show again how strong our platform is and how we keep widening our lead. Our mission still centers on changing how coronary artery disease is detected, diagnosed, managed, and treated. The outlook is promising, and I thank the HeartFlow team for all they do on behalf of our patients. I'll now hand things to Vikram, who will take you through the financial results and guidance.

John, thank you, and hello everyone this afternoon. The quarter I'll be discussing, except where I state otherwise, concluded on September 30, 2026. All growth rates I cite are measured against the prior year, and any financial figure besides revenue is non-GAAP unless I say otherwise. You can find reconciliations to the corresponding GAAP figures in the earnings release issued today. Our third-quarter results demonstrated once again how strong the HeartFlow financial model is. Revenue for the quarter totaled $72.9 million, an increase of 57.4%. In the U.S., revenue rose to $67.9 million, a gain of 60%, which includes $11.8 million from PLAC. Revenue from OUS and other sources climbed to $4.9 million. Worldwide revenue cases for the quarter totaled 98,155, which was up 89.5%. Results came from many parts of the business, including robust activations, steady FFR-CT use, growing plaque use, and further growth in the CCTA market. FFR-CT usage remained steady in our current accounts, and new accounts kept building up just as they have historically, as we have said before. It still takes roughly twelve months for a new account to reach close to full FFR-CT utilization. The right base for judging FFR-CT utilization is the eligible CCTA population. About 33% of CCTAs can use FFR-CT, which means the mature opportunity is around one-third of an account's overall CCTA volume. Plaque volumes were solid this quarter, helped by new account activations and by rising use inside accounts that were already live. With clinicians becoming more familiar with the product, we're observing wider participation from physicians and uptake among a greater portion of eligible CCTAs. PLAC can be used for roughly 60% of CCTAs, which offers a considerably larger utilization opportunity inside each account. Although plaque is still early on its adoption curve, the breadth and progression of utilization during the quarter boosted our confidence in its near- and long-term growth trajectory. Lastly, we grew our installed base at a robust rate in the third quarter, supported by strong execution from our commercial organization. As a reminder, we disclose installed-base metrics only on an annual basis. Moving to gross margin, third-quarter gross margin came in at 83.8% versus 76.8% in the third quarter of 2025. Our year-over-year gain comes from volume leverage, higher plaque revenue, and better production efficiency made possible by AI-driven automation. Operating expenses show disciplined investment behind our top-priority growth initiatives. SG&A for the third quarter came to $39.3 million, reflecting targeted spending on our commercial team to broaden adoption of the HeartFlow platform. Research and development costs were $26.8 million as we keep funding our innovation pipeline and the clinical evidence needed to support uptake of new products and widen our addressable markets. Total non-GAAP operating expenses reached $66.1 million, equal to 90.7% of revenue, versus 100.9% a year earlier. Our non-GAAP operating loss was cut by over 50%, to $5 million from $11.1 million last year, as revenue growth kept outpacing investment. For non-GAAP, we posted a net loss of $2.7 million, which works out to $0.03 per share; that compares with a non-GAAP net loss of $13.2 million, or $0.27 per share, in Q3 of 2025. Turning to GAAP, the net loss came in at $11.5 million, equating to $0.13 per share. Weighted average basic and diluted shares for the quarter totaled 87.2 million. Switching to the balance sheet, we ended the quarter with $253 million held in cash, cash equivalents, and investments. We remain highly confident that this balance sheet provides the capital required to fund operations through to profitability while continuing to invest in R&D and commercial expansion. Turning now to the revised 2026 forecast: the strong third-quarter results, combined with momentum in both FFR-CT and PLAC, justify a substantial raise to our full-year expectations. We now project total revenue of $262 million to $264 million, reflecting 49% to 50% growth. At the midpoint, this is $15 million above the earlier range of $246 million to $250 million. For plaque-specific revenue, the outlook rises to $36 million to $37 million. In light of third-quarter performance, we are also increasing full-year non-GAAP gross margin guidance to roughly 82.5%, a 550 basis point gain versus the prior year. Regarding operating costs, our projection for the entire year is that non-GAAP opex, measured against revenue, will decline by more than five percentage points compared with last year. We remain disciplined in how we direct any added investment—favoring efforts tied directly to growing revenue, advancing product innovation, and widening our addressable market. At the midpoint of our revenue outlook, gross profit growth comes out to roughly 60% for 2026. Finally, we are holding firm to our mid-term goal of an 85% non-GAAP gross margin. Given how our financial results keep improving, we have greater confidence that cash flow profitability will be reached by the middle of 2028. During Q3, each key pillar of our financial framework got stronger — revenue that holds up over time, gross margins that widened, more operating leverage, and a balance sheet with solid capital. As we close out 2026, we expect to carry considerable momentum and a clear route toward lasting profitable growth. At this point, I'll turn things back to John for his closing summary.

Thanks, Vikram, and thanks to all of you for being with us today. We value your ongoing interest and support as we move the HeartFlow AI platform forward toward becoming the new standard of care for detecting, diagnosing, managing, and treating coronary artery disease. We're excited to close out 2026 on a strong note, and with that, I'll hand the call over to the operator for Q&A.

Appreciate you fielding the question. Congratulations on yet another strong quarter. I've got two things. First, I was hoping to ask — the P4 data you brought up at TCT got a really warm reception in the room. I'd love to hear, sort of in the wake of the conference, how the publication and the presentation have affected your conversations and awareness coming out of the conference, particularly with clinicians and hospitals. Then I have a follow-up.

Yeah, absolutely. Thanks, Robbie. Good to hear your voice. With P4, the first point I want to make is that we genuinely believe the power of our platform is what counts. As we've mentioned before, CAD touches every step from the referring physician to the CT reader and on through to the interventionist. In that context, we believe single-purpose point solutions are not going to win out. And when it comes to scale, they certainly won't, while well-designed platforms will. That's exactly what we think we've got here. We're the sole platform covering the full continuum of care, and Navigator now carries that platform into the cath lab, which truly makes us stronger. With P4 now launched and the Navigate PCI data available, Navigator stands as the first and only PCI planning tool supported by prospectively validated accuracy and RCT-level data. At TCT—if you were in those sessions—the interventional cardiology community's enthusiasm was unmistakable. It's probably too soon to say what the final conclusion will be, but leaving TCT, we're quite pleased with how much interest there is. Along those lines, I should add that working with Boston Scientific will broaden our reach even more, and we believe it will generate greater demand for a CT-plus-HeartFlow pathway; so we're very happy as we come out of TCT. There's plenty to follow up on, but...

...I want to talk about FFR-CT and what a strong quarter it turned in — a big jump versus Q2. Looking at your accounts and at penetration, is it existing customers who are using it much more? Is it new customers using it much more than before? Is it broad-based? Are there particular areas where adoption looks better? Because it's quite impressive, particularly given how growth has paced through the year.

Many thanks. Yes, of course. Well, look, FFR-CT keeps serving as a growth engine for us, right? And much of this involves the same factors we've covered on calls in earlier quarters. Account acquisition for this quarter was again exceptional. Utilization is very robust — not only among newly added accounts and the pace at which they scale up, but also across our established customer base. Overall, we're quite encouraged by the performance of FFR-CT on every front. Looking ahead, we believe it will serve as a highly sustainable engine of growth for the company over the long term.

Hello, John and team — John here, standing in for Rick today. I figured I'd kick things off and focus on what's ahead of us. Obviously it was a strong quarter, with revenue rising by more than the beat. But I'd like to walk through the dynamics at play. It does seem to suggest some deceleration in the fourth quarter, in my view. I'd say it's somewhat tougher, so any color you can give on what you expect in Q4 compared with what you saw in Q3 would help.

Sure, and thanks for asking, John. Vikram here. First off, we're feeling really good about the momentum across both FFR-CT and PLAC. For FFR-CT, versus Q4, our guidance points to volume growth of almost 37% year over year. That's roughly 10 points higher than where consensus sits. So we're looking for demand to be strong again this quarter. Even with the volume upside, we're keeping our ASP assumptions unchanged, given the more recent trends we observed in Q2 and Q3. Q3 ASPs actually landed slightly ahead of expectations, and that was on top of a sizable volume beat. On PLAC, we anticipate utilization will keep ramping. Pricing also added to revenue growth in both Q2 and Q3. As we said before, the contractual price increases are mostly behind us in 2026. So for plaque pricing in Q4, we're expecting it to be roughly flat on a sequential basis. For both businesses, we've factored in the usual holiday seasonality as well as underlying CCTA volumes. Last thing, I think it's worth noting that our approach to guidance is the same one we've followed all year: we aim to set a baseline that leaves plenty of room for outperformance.

That's really useful. I also wanted to ask about the DECIDE data too, that propensity-matched study is quite interesting. I mean, it looks like there's a signal here that plaque is affecting outcomes and shaping treatment decisions. I was just wondering, what are you hearing from physicians about these findings, and beyond that, how is it shifting conversations with doctors who may not be certain how to apply the plaque data they currently have?

Yeah, sure. Thanks, John. So I believe the team would agree with me. In my view, the DECIDE data is quite favorable for the business. I see it as one more strong tailwind supporting plaque, adoption, and what's coming. The DECIDE registry is the biggest prospective registry of its type, with over 22,000 patients. If you remember a year ago, just over a year ago at SCCT, the primary endpoint we presented was that plaque alters how physicians medically manage patients. And management changed in more than 50% of patients, okay? Then the next question becomes, well, okay, what does that mean? And this year at AHA, we presented the one-year data, and it showed that plaque leads to both better targeted lipid levels and better outcomes, right? So 50% of patients reach their LDL goal by 90 days and they maintain that through a year. And from an outcomes standpoint, these patients have 34% fewer major CVD events in one year and 50% fewer MIs. So we're very pleased with this data; and, again, as I mentioned, I think it's another tailwind; now we need to pull this through the market via medical education. You know, we're just a couple days out of AHA here; but I think as physicians become more aware of this, it's going to continue to drive wind in our sails for plaque adoption.

Good afternoon, and thanks for taking my questions. I'd like to begin with something you might say isn't a great question, since I may be looking at it the wrong way. But regarding attachment rates, I'm just wondering how much physicians are ordering plaque together with FFR-CT rather than on its own? Last quarter you mentioned that you were beginning to see the full menu penetrate more widely across what you call your installed base. So I'm curious whether you're seeing both products adopted more and more within the same health systems, and what that means for revenue from the CCTA scan over time? Thank you.

Yeah, sure. Thank you for the question. First thing I'll say is that plaque adoption is going very well. The momentum is strong and significant, in my view, so we feel great about that. We track a number of metrics internally. Every metric we track is encouraging. New account activations are really strong. We're now on track to bring on 1,300 PLAC accounts by the end of the year. Just for a frame of reference, getting to 1,000 on FFR-CT took us eight years; on PLAC we'll get to 1,300 in two. I think that speaks to the demand in the market. Coverage continues to expand; we're now at about 82% covered lives, up from about 78% last quarter, so we feel good there, and across both cohorts of customers, existing as well as new, we see utilization expanding in a very favorable way; but I think we're only scratching the surface. As a reminder, PLAC is covered in about 60% of all patients, okay? So in a perfect world, you could have 60% utilization. We're nowhere near that. But what we do see is a steady range month over month and quarter over quarter, and so we're very pleased with that. I think we do see higher utilization in the same patients who are also eligible for FFR-CT, that's when stenosis is between 40% and 70%. But we're also seeing really favorable utilization in a kind of lower disease burden cohort, call it stenosis from 1% to 40%; so both look very healthy, and I think, as we just discussed, the one-year data out on DECIDE is going to continue to help. One thing I'll say is, as bullish as I am on the plaque picture, I just want to remind you, say it again, I don't believe anything in this business is a hockey stick. I think we're going to continue to see steady acquisition gains from here, but I wouldn't expect huge hockey-stick-type events moving forward.

Okay, may I pose a connected follow-up? I think it ties in. So, on one side, you're nearing EBITDA break-even, and you're managing that despite spending heavily on genuinely pushing forward and upgrading the commercial platform. So when we consider 2027 and the chances ahead of you — the solid return on investment you're seeing from a commercial sales force that's expanding and becoming more efficient — but weighing that against, you know, the push toward profitability — I mean, the adjusted EBITDA loss shrank to below $4 million this quarter. How should we think about it — maybe you could share your thinking on putting money into channel investment and growth versus the push toward getting to the other side of the EBITDA line.

Yes, thanks, Doug, for asking. Let me start with how 2027 looks. Again, it's early to discuss 2027, but I can give you a few pieces to work with. We'll lay out a fuller picture on our fourth-quarter call. Turning to operating expenses and how we're positioned for investment as 2027 gets closer, and with the momentum we're seeing in the business, we feel really good about delivering more operating leverage in 2027; we expect OPEX as a percentage of revenue to decline year-over-year compared with 2026, and EBITDA losses should narrow too. We'll accomplish that while keeping the growth-oriented investments we've discussed, mainly in R&D — whether funding new trials to expand the total addressable market or new products to expand the platform — and also in areas such as sales and marketing. On profitability, we project cash flow profitability by the middle of 2028. Our recent performance has made us more confident, those confidence levels have narrowed, and we hold enough cash on the balance sheet to reach that goal.

Hi everyone, I appreciate you taking my question, and congratulations on a solid quarter. First I'd like to zero in on Q3. John and Vikram, the two of you leaned heavily on words like inflection and accelerating records, plus ahead of expectations in Q3. All of that actually landed before the strong data you two shared over the past month or so. Could you two expand a bit on Q3? Specifically, what inflections are you two seeing inside the base business that are driving these better-than-expected results?

Absolutely, thanks Brandon. I appreciate the question. We're quite pleased with how the third quarter went, and honestly, every part of the business performed well. As I mentioned earlier, PLAC keeps building serious momentum in activations, utilizations, and volumes. Physicians are adopting it across a wider range of uses, which makes us happy. FFR-CT, as I noted, is a powerful growth driver — new accounts are joining, and utilization among both new and existing customers is very robust, so we view it as more durable than ever. Another piece we feel great about is our platform. So I'd say the market has a real appreciation for our platform, and in my view it's never been in a stronger position than it is today. What we offer is a distinctive solution that delivers value at every stage — with roadmap on the front end, and now PCI Navigator on the back end, backed by P4 data — and as customers expand their programs, they genuinely value how complete this offering is. That leaves us feeling good on that front. The final point I'd make concerns the broader CCTA market overall: we see it as healthy, it keeps expanding at a solid rate, and there appear to be plenty of favorable multi-year tailwinds supporting it.

Great; and maybe a quick follow-up — sorry if I missed it — did you provide any update on how many covered lives there are for plaque in the United States? And then, following on from that, you've mentioned that a lot of the plaque time-based contracts have already been renewed. Could you just give a sense of what share of contracts still need renewing, whether through the remainder of this year or going into 2027, in terms of adjusting pricing on the plaque side? Thanks, guys.