IceCure Medical Ltd (ICCM) Earnings Call Transcript & Summary

Good morning, and thank you for standing by. [Operator Instructions] Please be advised that today's conference call is being recorded. Before we begin, I will now take a moment to read statements about forward-looking statements. This call and the question-and-answer session that follows it contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Words such as expects, anticipates, intends, plans, believes, seeks, estimates and similar expressions or variations of such words are intended to identify forward-looking statements. For example, we are using forward-looking statements in this presentation when we discuss the continued growth and sustainability of commercial adoption and utilization of ProSense, the expansion of the company's U.S. and international commercial presence, the anticipated enrollment of the first patients in and continued expansion of the CHoICE study, the potential for clinical evidence and commercial utilization to support physician confidence, reimbursement initiatives and broader market adoption. the company's commercialization efforts in Japan, the plans used for its financial resources and the company's ability to execute its long-term growth strategy and create sustainable long-term shareholder value. The forward-looking statements contained or implied during this call are subject to other risks and uncertainties, many of which are beyond the control of the company, including those set forth in the Risk Factors section of the company's annual report on Form 20-F for the year ended December 31, 2025, filed with the SEC on March 17, 2026, which is available on the SEC's website, www.sec.gov. The company disclaims any intention or obligation, except as required by law, to update or revise any forward-looking statements, whether because of new information, future events or otherwise. This conference call contains time-sensitive information and speaks only as of the live broadcast today, August 12, 2026. I will now turn the call over to IceCure Medical's CEO, Eyal Shamir. Eyal, please go ahead.

Thank you, operator, and thank you, everyone, for joining us today. The first half of 2026 marks an important inflection point for IceCure. Over the past several years, we have focused on building the clinical regulatory and scientific foundation for ProSense. We invested in generating clinical evidence, achieving important regulatory milestones and educating physicians around the world. Today, we are beginning to see those investments translate into measurable commercial momentum, while continuing to generate the evidence that supports future growth. We believe what makes this stage of our evolution particularly important is that our clinical and commercial strategies are no longer progressing on a separate track, they are increasingly reinforcing one another. Growing physician adoption in generating additional real-world clinical experience that expanding both of evidence strengthen physician confidence support future reimbursement initiatives and encourage broader adoption. As more physicians adopt ProSense, they generate additional real-world evidence, creating a self-reinforcing cycle that we believe will continue to strengthen over time. This is exactly the transition we have been working towards. During the first half of the year, revenue increased approximately 45% year-over-year to $1.8 million, driven by growth of both ProSense systems and disposable probes. More importantly, this growth reflects increasing physician adoption and utilization of our technology across our commercial installed base. One of the most meaningful indicators of commercial progress is not simply the number of systems we placed, but how frequently those systems are being used. Increasing disposable probe sales suggest that physicians are incorporating ProSense into routine clinical practice and treating more patients over time. This recurring utilization gives us confidence that commercial adoption is becoming broader, deeper and increasingly sustainable. Following FDA clearance for early-stage low-risk breast cancer, we continue expanding our U.S. commercial footprint, achieving approximately 70% growth in our active U.S. commercial installed base. At the same time, we are strengthening our commercial organization through additional sales hires in key U.S. regions, while continuing to expand our presence across select international markets. Another important example of how our clinical and commercial strategies are coming together in our FDA-approved CHoICE post-market study. I would like to emphasize an important point regarding the CHoICE study. Unlike traditional pre-marketing clinical study, the CHoICE trial is a post-market study is not separate from our commercialization strategy, rather it is an extension of it. Participating clinical sites purchase disposable probe as part of the routine patient care while simultaneously contributing value real-world clinical evidence. Some participating physicians have already transitioned from clinical investigators into active commercial users of ProSense, while additional leading institutions are joining the study and becoming a new users of our technology. This means that clinical evidence generating is supporting commercial adoption, while commercial utilization is [ single like in ] expanding the real-world evidence supporting process. As additional sites join, we expect to achieve another important near-term milestone with the enrollment of the first patients in the CHoICE study. We remain on track to execute against our planned objectives and look forward to providing additional updates as the CHoICE study will continue to expand. We believe that the growing body of real-world evidence generated through the CHoICE study, together with increasing commercial adoption will continue supporting physician confidence, future reimbursement initiatives and a broader market adoption over time. Beyond the CHoICE study, we continue strengthening the scientific foundation supporting process. During the first half of 2026, we reported positive 5-year results from the -- our ICESECRET kidney cancer study and presented the final data at the ECIO 2026. We also continue important recognition from the medical community through inclusion of ProSense in the American Society of Breast Surgeons resource guide, new peer-reviewed publications in the International Journal of Surgery and PLOS ONE and the Society of Interventional Oncology petition requesting the inclusion of cryoablation in the National Comprehensive Cancer Network Breast Cancer Guideline, the NCCN. Outside of the United States, we continue making encouraging progress across several strategic international markets. In Japan, for example, we continue to engage constructively with leading physicians, medical societies and strategic partners as we advance our long-term commercialization efforts. While regulatory process takes time, we remain encouraged by the growing level of clinical interest and engagement we continue to see. Finally, during the second quarter of 2026, we further strengthened our balance sheet through our recent financing, ending the first half with approximately $12 million in cash and cash equivalents. This provides us with the financial flexibility to continue investing in commercial expansions, physician engagement, clinical evidence generating and reimbursement initiatives as we execute our long-term growth strategy. When I step back and look at the first half of 2026, I don't see a series of individual milestones. I see multiple independent indicators, all pointing in the same direction. revenue growth, expanding physician adoption, increasing disposable probe utilization, continued clinical recognition, advance of the CHoICE trial and the strengthened financial position. Individually, each of these achievements is important together, they tell a much bigger story. They demonstrate that IceCure is entering a new phase of its evolution, one in which commercial execution, clinical leadership and financial discipline are increasingly working together to build sustainable long-term shareholder value. With that, I will turn the call over to our Chief Financial Officer, Meir Peleg, who will review our financial results in greater detail.

Thank you, Eyal. I will briefly review our financial results for the first half of 2026. Revenue for the first half of 2026 increased approximately 45% year-over-year to $1.8 million compared to $1.25 million in the same period last year. The growth was driven by higher sales of both ProSense systems and disposable probes. This growth was driven by higher sales of both ProSense systems and disposable probes, reflecting continued commercial expansion and increasing utilization across our commercial install base. Gross profit increased to $548,000 during the first half of 2026 compared to $349,000 in the same period last year. Gross margin improved to 30% compared to 28% in the prior year period, primarily reflecting increased scale and improved operating leverage over our fixed manufacturing and operating cost base as revenue increased. This margin expansion would have been even stronger after the impact of foreign exchange fluctuation during the period, which partially offset the underlying operational improvement. As we continue building commercial scale, we remain focused on balancing investment with disciplined financial management. During the first half of 2026, we continued investing in commercial expansion, clinical programs and organizational capabilities to support our long-term growth strategy. Research and development expenses were $4.3 million in the first half of 2026 compared to $3.4 million in the first half of 2025. The increase was primarily driven by the initiation of the CHoICE study, supporting the continued clinical expansion of ProSense as well as the impact of foreign exchange fluctuations on our largely Israel-based cost structure. Sales and marketing expenses were $2.5 million in the first half of 2026 compared to $2 million in the first half of 2025. The increase primarily reflects investment in expanding our U.S. commercial organization, including additional sales personnel to support growing market activity, physician adoption and continued expansion on our commercial install base. General and administrative expenses were $2.4 million in the first half of 2026 compared to $1.9 million in the first half of 2025. The increase was primarily driven by the impact of foreign exchange fluctuations on payroll-related expenses and higher noncash share-based compensation expenses. Net loss for the first half of 2026 was $8.8 million or $3.17 per share compared to $7 million or $3.59 per share during the first half of 2025. We ended the first half of 2026 with approximately $12 million in cash and cash equivalents compared to $8.9 million at year-end 2025, reflecting the financing activities completed during the first half, including approximately $8.5 million in gross proceeds raised during the second quarter. As always, we remain focused on disciplined capital allocation, while supporting the commercial, clinical and regulatory initiatives that we believe will drive long-term shareholder value. With that, operator, we are now ready to open the line for questions.

[Operator Instructions] The first question is from Kemp Dolliver from Brookline Capital Markets.

I'll ask 2 or 3 questions and go back in the queue. First of all, when I look at the growth in systems revenue year-over-year, how comparable is that revenue in the context of the mix of purchases versus leases since that could impact how the numbers flow through the income statement?

Meir, please. Kemp, this is Eyal. Meir, if you could please handle this question.

Yes, sure. So for your question, most of our revenue comes from new purchases of systems rather than lease, which we do. Yes.

Has that mix changed year-over-year? That's really what I'm asking.

Kemp, let me just be fully clear. You asked if the purchase system, especially in the U.S. increased year-over-year to compare with the placement. This is your question?

Well, the -- that's -- well, yes, that's another way to think about the question, sure.

Yes. So firstly, the percentage of the disposable remain the same with a little bit of increase year-over-year for the utilization of our single-use probe, we could see more utilization. But basically, it remains the same with the some growth. And we could see that especially for the coming post-market studies that will be together with the commercialization activities because any site that will participate to the study will be a commercial site. We could see more consoles that have been purchased than we just do a placement with a special probe, special price, higher price, which we see they are very encouraged that the sites are willing to buy the console and they put it as a new treatment and new technology as part of the coming commercialization offering and new treatment and will participate to the study as well. So we could see growth in both sides.

Yes. Maybe let me add some more color. So compared to same period last year as a percentage, we sold about 20%, 25% more systems this in 2026 first half compared to H1 2025, while the placement number is the same. So percentage-wise, the placement or lease, as you call it, is less in percentage than sales this year compared to last year.

And what's your installed base in the U.S. now?

Again, as we develop a 70% increase on our active, it went up about -- the active sites, it's close to 30 in the U.S. currently.

That was 30, 3-0.

No, no. It's above 30 -- 3-0 sites altogether.

The next question is from Anthony Vendetti of Maxim Group.

So I just want to -- I can clarify, too. The commercial footprint grew 70%. So what is the active commercial install base? Did you just give that number? I wasn't clear.

No, we just mentioned, if you remember, during June that since the FDA on October last year, we grew by 70% on the active sites.

Okay. And that number as of June 30th or as of today, active commercial sites is how many?

It is above 30 because we have some sites -- we have some sites that they will not participate. They just will continue to do commercial use only like we announced some of them in the last 6 months or even older excellent users, some concierge users who will continue to do a high number of cases, but they will not be part of the PMS.

Part of the clinical. So -- and the number of clinical sites as of now or June 30th, is how many?

We have in process more than 10. We announced the first 2 that we have a signed contract, IRB approval. But on a weekly base, we have more sites in a different process of agreeing on the budget contract and IRB approval. But the first 2 sites, the third one will come extremely soon, and we expect the first patients in the next 3 to 4 weeks.

Okay. So you have more than 10 that you've identified that you're working with, but you have 2 that have gone through the whole process of IRB approval and signed the contract and you're expecting to treat the first patient in the next 3 or 4 weeks. Is that correct?

Yes. Exactly, Anthony.

And then on the gross margin this quarter, so it was a little bit lower than expectation. Was that -- is there were some maybe onetime charges in there? Or was it just a sales mix between the probes and the system sales?