Zomedica Corp. (ZOMDF) Earnings Call Transcript & Summary

Welcome to Zomedica's Fourth Friday at Four Investor Webinar. Today's session is titled Zomedica International, Building a Global Platform for Veterinary Innovation, a focused look at the strategy, the partners and the global opportunity driving the company's next phase of growth. Before we begin, I want to remind current and potential investors that we will be making various remarks about future expectations, plans and prospects that are considered forward-looking statements. There are risks that actual results may differ from these statements. We refer you to the safe harbor statement on screen or to the Risk Factors sections of our public filings which can be found on our website under investor filings, EDGAR and SEDAR +. The statements are made as of today, August 28, 2026, and reflect our expectations as of today. Thank you for joining us for Zomedica's investor webinar series. We're excited to have you with us as we take a closer look at our company. our innovative product platforms and the passionate people driving our success. This series is designed to give you a deeper understanding of how we're delivering value to veterinarians and to our shareholders. At Zomedica, our mission is to deliver innovative diagnostic and therapeutic technologies that empower veterinarians to focus on what they love most, enhancing pet care and improving pet parent satisfaction. Equally important, we help vets with what they need most, streamlining workflow, increasing cash flow and boosting practice profitability. At Zomedica, our mission is guided by what we call our 5 pillars. These are core objectives that shape every decision we make about products and innovation. First and foremost, we aim to improve the quality of care for the pets. Equally important is enhancing the satisfaction of the pet parent, ensuring they feel confident and comfortable with the care provided. Our solutions also focus heavily on improving the veterinarians daily workflow, helping veterinary practices operate smoothly and efficiently. Additionally, we are committed to positively impacting veterinarian cash flow making sure our offerings are financially accessible and beneficial. Finally, our ultimate goal is to increase veterinarian profitability, providing products and solutions that help veterinary clinics grow and thrive financially. Today's session will show how international expansion is not separate from this framework. It is a direct expression of it. Now let's hear from Larry Heaton, Zomedica's Chief Executive Officer.

Good afternoon. Welcome to today's Fourth Friday at Four Webinar. I'm Larry Heaton, Chief Executive Officer of Zomedica. Thanks for joining us today. We appreciate you taking the time, and we appreciate your continued interest and support for your company and our progress. Today's session focuses on one of the most important strategic initiatives underway at Zomedica, our international expansion. We've titled this session Zomedica International, building a global platform for veterinary innovation. And I believe the content you'll see today demonstrates why that title was chosen. When we look at the global veterinary market, the opportunity is clear. The same trends driving growth in the United States rising standards of care, increasing investment in diagnostics and therapeutics and growing demand for clinical efficiency are accelerating in markets around the world. Veterinarians in Europe, Asia Pacific, the Middle East and Latin America are looking for the same quality, reliability and innovation that has driven the adoption of our products domestically. Over the past several years, we've invested in the infrastructure and regulatory approval prerequisites to meet that demand. We established distribution partnerships across multiple high-value regions, and have identified additional opportunities in new markets. We secured regulatory approvals that allow us to bring our full product portfolio to international markets, and we've invested in dedicated international leadership to ensure this expansion is executed with the same discipline and focus we apply to everything we do. What makes this story compelling for us as shareholders is the model. We're not building facilities or hiring large international teams. Instead, we are leveraging established credible distribution partners who know their markets and share our commitment to clinical excellence. It's an asset-light approach that allows us to expand our reach while maintaining operating discipline. Today, you'll hear from Paul Tye, our Vice President of International Sales, who is leading the execution of this strategy. You'll hear from Kevin Klass, our Senior Vice President of Sales on how International integrates with our broader commercial organization. And you'll hear from Dr. Rod Richards, who will provide a clinical perspective from outside the United States on how our products are performing in international veterinary practice. Following the discussion of our international business, we'll pivot to a review of our second quarter 2026 performance by our Senior Vice President of Finance and Corporate Controller, Mike Zuehlke. Following that, we'll turn to your questions and comments. With that, let's get started.

Zomedica products are now reaching veterinarians across 6 continents. The company has established distribution coverage throughout the European Union and the United Kingdom for Equine products. with companion animal distribution active in the United Kingdom, Ireland, Italy and Turkey. In Asia Pacific, Zomedica is present in Japan through its own subsidiary and in Taiwan, Hong Kong, South Korea, Singapore, Indonesia, Australia and New Zealand through distribution. In the Middle East, the company is active in the Assisi, including the UAE, Saudi Arabia, Qatar and Egypt. And across the Americas, distribution extends into Canada, Mexico, Costa Rica, Argentina, Brazil, Uruguay and Chile, with additional markets across multiple regions in active negotiation. This is not aspirational. These are established partners, operating through an asset-light model that applies the same platform strategy and cross-sell logic driving domestic momentum. Today, you will hear directly from Paul Tye, vice President of International Sales, on the strategy and partnerships behind this expansion. Kevin Klass, Senior Vice President of Sales, will explain how international fits within the broader commercial organization. And Dr. Rod Richards will offer a clinical perspective on how Zomedica products are performing in veterinary practice outside the United States. Zomedica's international story did not begin with a single announcement. It began with a product that had already earned clinical credibility around the world. It began with Zomedica selling products directly to customers and supporting them from abroad. The company continues that today where an in-country distribution channel is not yet established. PulseVet Shockwave therapy has been used by equine veterinarians across multiple continents for years. Assisi Loop products have also been marketed through international distribution channels in Canada and the Asia Pacific markets. that existing clinical footprint gave Zomedica something most companies entering international markets do not have. an installed base of practitioners who already knew the product and trusted the outcomes. Under current leadership, Zomedica made a deliberate decision to build on that foundation. The company established a structured approach, identify high-value veterinary markets secure distribution partnerships with established credible organizations in those markets and expand the product portfolio available through those partners over time. That installed base did not develop through a single channel. Zomedica's international presence has grown through 2 parallel paths: direct sales to veterinary customers in markets where a formal distribution partner was not yet in place and structured distribution partnerships with established organizations in high-value markets. Today, 29 markets are served through active distribution agreements with an additional 15 markets where Zomedica has placed products through direct sales ahead of a formal distributor relationship. In Europe, distribution covers all major EU equine markets. with companion animal distribution active across key markets like the United Kingdom and Italy and direct sales extending into select markets such as Poland. In Asia Pacific, distribution spans key markets, including Japan, Australia and South Korea, while direct sales have reached additional markets, such as Hong Kong and Taiwan. In the Middle East, the UAE serves as the distribution gateway to the GCC region, with direct sales also active in Israel. Across the Americas, distribution partnerships are active in markets like Canada, Uruguay, Argentina, Brazil and Chile, with direct sales reaching additional markets, including Mexico. And in Africa, direct sales have reached an early market in Zambia. This dual-channel approach is deliberate. Direct sales allows Zomedica to serve demand and build clinical credibility in markets where formal distribution has not yet been established, while distribution partnerships provide the infrastructure for scaled long-term growth. PulseVet Shockwave therapy systems have been sold into 35 countries across 5 continents. Across the Americas, systems are active in key markets, including Canada, Uruguay, Argentina, Colombia, Brazil and Chile. In Europe, placement spans 17 countries, led by markets such as the United Kingdom, Germany and Spain. In the Middle East, systems are in the United Arab Emirates and Israel. And in Asia Pacific, placements cover key markets, including Japan, China and Australia. With additional units tracked across other international markets. This is not a projection. These are active placements with veterinarians who are using the technology in clinical practice today. That global installed base gives Zomedica something most companies entering international markets do not have an existing network of practitioners who already know the product and trust the outcomes. Assisi therapeutic devices have been sold into 32 countries worldwide through a combination of 15 distribution partner markets and 16 direct-to-consumer markets. In the Americas, distribution covers key markets, including Canada and Brazil, with direct-to-consumer sales extending into Mexico. In Europe, distribution is active in markets such as Germany and the United Kingdom. While direct-to-consumer sales extend across additional markets, including France, Italy and Spain. In the Middle East, distribution operates through the UAE. In Asia Pacific, distribution covers key markets, including Japan and Australia, with direct-to-consumer sales reaching additional markets such as China. And in Africa, direct-to-consumer sales have reached an early market in Zambia. The Assisi product line demonstrates the same pattern. Clinical credibility built through direct engagement with veterinarians and pet parents creating a foundation that distribution partnerships formalize and scale. Regulatory milestones have been critical enablers. The CE certification of the Vet Guardian monitor in 2024, combined with existing CE marks across the portfolio, has opened pathways to distribute the full range of Zomedica products throughout Europe, and in other markets that recognize CE certification. International growth at Zomedica is built on a distribution model and the quality of that model depends entirely on the quality of the partners. Zomedica's approach to partner selection is deliberate. The company evaluates potential distribution partners against clear criteria, clinical credibility in their market, established access to the veterinary customer base, regulatory expertise and alignment with Zomedica's standards for training, support and clinical education. These are not transactional relationships. Distribution agreements are structured to support long-term growth. In some markets, agreements are exclusive giving the distribution partner full commitment to invest in building Zomedica's presence. In others, nonexclusive arrangements allow flexibility to serve different segments or product categories through the most capable channel. Today, Zomedica's active distribution coverage spans 4 regions. In Europe, all major EU markets are covered for equine products with companion animal distribution active in the United Kingdom, Ireland, Italy and Turkey. In Asia Pacific, distribution reaches Japan, Taiwan, Hong Kong, Singapore, Indonesia, Australia and New Zealand. The UAE provides Middle East coverage. And in the Americas, Canada, Uruguay, Brazil, Argentina, Costa Rica and Chile are active. The pipeline of additional new markets in negotiation is significant and ranges across Europe, Asia and South America, each representing substantial opportunities. The recent addition of Zomedica's Vice President, International, Paul Tye, provides the resource to accelerate these efforts. A key feature of the model is how distribution agreements evolve. Partners typically begin with 1 or 2 anchor products and then expand to additional product lines as the relationship matures and market traction builds. This land and expand approach reduces upfront risk for both parties while creating a natural pathway to increasing revenue per partner over time. Zomedica also invests in the success of its distribution partners. Training, onboarding and ongoing clinical support are provided to ensure that international veterinarians receive the same level of product knowledge and clinical education that domestic customers experience. regulatory support, including CE marking, import registrations and compliance documentation is managed in coordination with each partner. The international veterinary market represents a substantial and growing opportunity for Zomedica. In Europe alone, the veterinary diagnostics market is estimated at over $4 billion annually with growth rates approaching 10%. The European Equine health care market exceeds $1 billion and is projected to grow at nearly 7% annually through the end of the decade, and these figures represent just 1 region. When you add Asia Pacific, the Middle East Canada and Latin America, the total addressable market outside the United States for Zomedica's product categories is significant. What makes these markets attractive is not just their size, it is their trajectory. Rising veterinary care standards, increasing pet ownership and growing investment in diagnostic and therapeutic technology are driving demand across every region where Zomedica is now active or in negotiation. Zomedica's international revenue performance reflects this opportunity. Today, Zomedica products are sold in 44 international markets across both direct sales and distribution partnerships. International sales grew 18% in fiscal year 2025. In the second quarter of 2026, international sales were up 17% year-over-year. Driven by a combination of organic growth and orders from distribution partners activated earlier that year. Looking at growth drivers. Several factors support continued international momentum. New distribution partnerships are adding geographic coverage, expanding the number of markets where Zomedica products are available. Within existing partnerships, portfolio expansion is increasing the number of products distributed in each market, replicating the land and expand approach we have domestically. Recurring revenue from consumables and assays is flowing through international distribution channels building the same foundation of predictable repeat revenue that anchors the domestic business and regulatory milestones, particularly CE certifications, continue to unlock product availability in European and other markets. International revenue continues to grow. And with a number of markets in active negotiation, we believe the runway ahead remains substantial. The second quarter of 2026 was the best quarter in Zomedica's international sales history. International sales in the quarter reached $1.7 million, that marks 12 consecutive quarters with international sales exceeding $1 million. The TRUFORMA platform delivered the most striking growth with second quarter results up 873% year-over-year. Leading Zomedica's international expansion is Paul Tye, Vice President of International Sales. Paul brings extensive experience in the international veterinary marketplace and is responsible for building and managing the company's global distribution network. Here is Paul on the strategy behind Zomedica's international growth.

Identifying and evaluating distributors is done in multiple ways. Of course, I do believe we have a very strong advantage with my 35 years of experience in the industry globally. And my networks contacts and connections I already know many things national distributors worldwide. We're also understanding the from the -- those will be appropriate infrastructure, core products carried, including competitive. Due diligence is important, having a check is to ensure the financial security, track record of growth, market success and obviously having a good reputation within their respective markets. We do an introductory process from an initial meeting to the next phase of signing an NDA, detailed presentation for both Zomedica and a potential partner to understand the cultural fit and competencies. Whilst that's important site visits to inspect the infrastructure confirm capabilities, meet the way employees and also buy 1 or 2 of their key customers is key to making sure that we have the right potential partner. This will build a picture for a long-term partnership and success. A key factor to success for our partners is a very strong and mutual cut relationship. Investing time into that partnership, ongoing and consistent training, regular visits and of course, close support. Now of course, need to be really invested and excited about Zomedica products and dedicated a focused sales team and good internal support across their operations and for infrastructure. And lastly, strong lion market knowledge with an excellent customer base. Interaction, of course, Europe is the big market outside of North America. So therefore, the first target will always be the Nordics, U.K. and Ireland, Germany, France, Italy, Spain and Benelux. We're slightly close behind is Latin America and the Asia Pacific regions, which are exciting, rapidly growing a key market for us to enter. What's really key to understand is that whilst the biggest readers have the largest total potential, this does not always mean that they are the easiest to enter Europe with its multiple countries, cultures, languages, given size complicated markets or also a vice penetrated markets competitively. So it's key for Zomedica for us to use our U.S. -- niche unique products and therefore, limited competition, and therefore, not in the appropriate country market to enter, comes from when the opportunity arises, experience knowledge and who you know. And this is where I believe that my experience in the industry will help us deliver that strategy. Carrying myself commercially and Dr. Richards, our technical expert and vet based in Switzerland, who are part with data are the general contracts and have a close relations with customers. However, we also, of course, leverage the large U.S. operational support teams to offer customer technical support data, training expertise. We also leverage the U.S. via teams and virtual meetings. As we grow and have scale, we will bring in more local support for language, time so coverage and account management. It's important that as we grow and have more international coverage that distributor partners get the day-to-day of support they need to be successful. Over the next 12 to 24 months, we have some key priorities. Of course, one is to support our existing parts add to their portfolio, continue with our support and training and help them grow within their markets. But also to expand geographically internationally and to expand our footprint within multiple countries with new distributor partners. We're working on some existing contractual developments to date, which we are hoping to exploit and to execute over the next few months and continue to expect big priorities, of course, multiple countries within Europe but Asia and Latin America are also high priorities for us to expect.

Paul and his team are executing a disciplined approach to international expansion. Identifying the right partners in the right markets with the right capabilities to represent Zomedica's portfolio. International distribution at Zomedica does not operate in isolation. It is fully integrated into the company's broader commercial organization under the leadership of Kevin Class, Senior Vice President of Sales. Here's Kevin on how international fits within the overall sales strategy.

International sales is a really important part of our overall sales strategy. We have established products in the United States like PulseVet and TRUFORMA that have high demand outside the United States and going through distribution helps us get better worldwide reach. As we launch new products and learn more about them in the United States, we can leverage these established distribution networks for a more rapid launch. The top products selling outside the United States are Pulse met partly because of the known entity within the equine industry. It is just far and away superior to so much else that's out there. We've gotten tremendous adoption. We also have some great international distribution partners for that product. TRUFORMA is right behind it and the factory pharma right now is probably growing faster than anything else, again, given our ability to leverage the equine business. but also the differential factor that we have in small animal. The 2 hot international products that I mentioned, PulseVet and TRUFORMA, both have very nice recurring revenue. And as such, it helps us grow that business in compound on an annual basis. And as we launch additional tests on the true format, that becomes even more so. We have a few key players within the United States that support both the U.S. and international markets. And these people know a lot about the products and can leverage that experience as we go international and to work with Paul, who's our key person internationally. Additionally, our marketing team has created materials and studies and so forth that can also be leveraged internationally. So we have a head start when we go into a given geography. We do sometimes learn some things internationally that do help us in the United States. Obviously, if we get additional languages, foreign instrument, as an example, we can leverage them in the United States. Also, things like reporting units on the True Pharma, for instance, was the demand that we had outside the United States that may be a preference within the United States. So generally speaking, the earnings are from domestic to international, but it does sometimes look the other way.

That organizational alignment is critical. It ensures that international growth is supported by the same commercial infrastructure, product expertise and clinical resources that drive domestic performance. The strongest validation of any international strategy comes from the clinicians using the products. Dr. Rod Richards is a veterinarian with experience practicing outside the United States with direct experience using Zomedica products, particularly PulseVet Shockwave therapy in international clinical settings. Here's Dr. Richard on what he has observed.

Hello Dr. Rod Richards with Zomedica here. I started shockwaving with the Equitron in Singapore in the late '90s and found the results so amazing. I joined the manufacturer in Switzerland. I've been managing the international business for the company, PulseVet and been with Zomedica for 7 years now. What I've observed is that the international performance source community is extremely well connected, which means that new products coming onto the market, which really improve the management of Equine athletes gain acceptance and uptake around the world. This is why the PulseVet system is still so very popular globally. Pulse is clinically effective and Equine vets around the globe understand the benefit that Pulse can bring to their Equine patients. PulseVet is a unique product. It is the smallest electrohydraulic shock wave system designed for use by veterinarians in practice or on the road. The electrohydraulic technology brings clinical advantages, which means shorter and fewer treatments than other devices can achieve. In addition, there are numerous scientific studies using PulseVet, which showed clinical efficacy. In a word, PulseVet is incomparable. TRUFORMA is a game changer in equine Medicine. Until Zomedica developed the eACTH assay on True former all reference labs had measured eACTH with a significant cross reaction with a peptide called corticotropin intermediate low peptide or pipe. This was and is due to the technology behind the chemiluminescent assays that reference labs use. CLIP does not appear to have a hormone role at this stage. But by measuring CLIP and eACTH together, the true level of eACTH remained uncertain. The bulk acoustic wave technology of TRUFORMA enables vets to measure the absolute value of eACTH in equines for the first time. This is having a major impact on how vets manage wares with PPID today and going forward. In a word, TRUFORMA is incomparable. Horses generally respond very well to shockwave therapy with pulsed and with 0 significant side effects. This gives our customers confidence to treat and experiment a little, thanks to the pioneering work of one customer, we've been developing therapy for asthma and EIPH and horses which is showing good results. Who would have thought such a therapy would be a reality, and there are more conditions being investigated at this time. Geriatric dogs can also benefit greatly from therapy with PulseVet. I have seen the comfort it can bring to owners who have an old dog with, for example, chronic back pain and intolerance to assay therapy who responds well to PulseVet. The accuracy and dynamic range of TRUFORMA gives veterinarians unique assays and also reference laboratory precision in the practice. This will improve the medical care of our companion animals and horses greatly.

Clinical validation from practitioners outside the United States reinforces a key point for shareholders. Zomedica products are not simply being exported. They are being adopted, integrated into international workflows and delivering outcomes that meet or exceed the standards veterinarians in those markets demand. Zomedica's international product ecosystem follows the same logic as the domestic portfolio, diagnostics, therapeutics and monitoring, designed to work together within the clinical workflow. What differs internationally is the sequencing of how products enter each market. Therapeutics lead internationally. PulseVet shockwave therapy has the strongest global presence with an established clinical reputation in Equine markets and growing adoption for companion animal applications. The Assisi Loop and EquaLoop therapeutic devices established in the Asia Pacific markets are expanding into European markets and Vetagel Hemostatic Jaw, a low-priced universally needed consumable is increasingly being positioned as an entry product for new international markets. opening distribution relationships that create a pathway to larger product placements over time. On the diagnostics side, the TRUFORMA platform has launched in Europe for Equine applications with companion animal potential across multiple regions. TRUVIEW digital cytology is expanding its international availability in monitoring, the Vet Guardian Plus monitor is CE certified for European markets and is being distributed across the United Kingdom, Europe and additional territories. For shareholders, the important point is how these products work together internationally, just as they do domestically, the land and expand model applies. A distribution partner begins with an anchor product, builds clinical traction and customer relationships and then adds additional products from the Zomedica portfolio. Each product added increases revenue per partner, consumables and assays generate recurring revenue that builds predictability over time. and regulatory milestones, particularly CE certifications, unlock the ability to expand the product portfolio with an existing geographic coverage without requiring new distribution agreements. The result is a compounding growth model, more markets, more products per market, more recurring revenue per product, applied through an asset-light distribution infrastructure that maintains operating discipline.

Thank you. I hope today's session has given you a clear picture of what we're building internationally and why we believe this represents one of the most significant growth opportunities in front of Zomedica. Let me leave you with a couple of key points. First, international expansion is not an experiment for us. It is a deliberate, structured strategy that we've been executing methodically, identifying high-value markets, securing the right distribution partners and building the infrastructure to support long-term growth. Second, the model works. We are reaching veterinarians across 6 continents through an asset-light distribution approach that allows us to grow our international presence without the capital intensity of building operations in every market that we enter. Third, we're applying the same platform strategy internationally that has driven our domestic momentum, the same products, the same cross-sell approach guided by our 5 pillars, the same focus on recurring revenue through consumables and assays. What has worked in the United States is now working across Europe, Asia Pacific, the Middle East and the Americas. And lastly, the runway ahead is substantial. With active distribution across more than a dozen countries and a significant number of additional markets in negotiation, we're still in the early stages of what this can become. We believe international markets represent one of Zomedica's most compelling growth opportunities built on proven products, strong partnerships and a disciplined strategy for global expansion. Thank you for joining us today. We appreciate your time and your interest and support of Zomedica. With that, I'm going to hand things over to our Senior Vice President of Finance and Corporate Controller, Mike Zuehlke, who will walk you through our financial results for the second quarter of 2026, and outlook in more detail.

Good afternoon. I'd like to begin by wishing everyone an enjoyable fall season as we transition to cooler temperatures and adjust to the return to school schedules. Most importantly, we want to acknowledge and thank you for your continued interest and support of Zomedica as is becoming a trend. I'm excited today to detail another record quarter for Zomedica and continued progress towards cash flow breakeven and get profitability. Zomedica delivered another impressive performance in the second quarter, with revenue increasing and operating expenses and cash burn continuing to decrease. The second quarter of 2026 marked our 22nd consecutive quarter of record year-on-year revenue. Our 37% year-over-year revenue growth was driven by several key factors. First, we continue to see strong demand for our PulseVet and Assisi therapeutic device products. Second, we saw continued adoption of our diagnostic offerings, particularly our TRUFORMA platform. This growth has been supported by collaboration with our distributors including our relationships with Boehringer Ingelheim Animal Health in the U.S. and Canada as well as our expansion into additional international territories. And third, our Development Services segment continued to contribute meaningfully generating another $1.4 million in revenue during the second quarter. From an operational perspective, we continue to execute with discipline. Gross margins remained healthy at 64%. Operating expenses were down $2.6 million or 20% and compared to the prior year. Notably, expenses were down in all 3 report groupings: G&A, R&D and selling and marketing. Our adjusted non-GAAP EBITDA loss improved to $2.3 million compared to a loss of $5.5 million in the second quarter of 2025, an improvement of 59% for the first half of 2026, our adjusted non-GAAP EBITDA loss has improved 58% versus the first half of 2025. Finally, cash burn improved by $2.1 million, representing a 38% reduction in -- from the second quarter of 2025. Looking ahead, our priorities remain clear. accelerating global adoption across our innovative portfolio, expanding our recurring revenue streams via our consumables products and continued progression toward an achievement of cash flow breakeven and profitability. We believe our record second quarter performance, expanding commercial partnerships, ongoing activity within our Development Services segment and strong balance sheet all position us well for the remainder of 2026 and beyond. We remain focused on executing our growth strategy, improving operating efficiency and creating long-term shareholder value. I will now provide more detail on the components of our strong performance, beginning with revenue. Total revenue for the second quarter was $9.5 million, an increase of 37% compared to prior year and a record for the second quarter of the year. The 37% increase over the prior year was highlighted by the following: our core products, which encompass our diagnostics and therapeutic devices segments were up 16% compared to the prior year, representing the strongest second quarter in the company's history for our core product portfolio and demonstrating healthy organic demand across our business. Diagnostics segment revenue increased 77% for the quarter and is up 75% year-to-date. As a result of continued adoption of our TRUFORMA point-of-care diagnostic platform and the utilization of our expanded menu of assays, notably among equine veterinarians. Therapeutic Devices segment revenue increased 9% for the quarter, driven by the continued strength of our PulseVet and Assisi products. Capital revenues, which we have stated before, can be choppy, increased 14% over the prior year. which we anticipate will drive consumables revenue growth in future quarters. Our Development Services segment contributed another $1.4 million during the second quarter, bringing the year-to-date total to $3.4 million and $6.4 million in total since we introduced the segment in the second half of 2025. Across all segments, our consumables revenue increased 26% for the quarter and is up 24% year-to-date. This growth is again driven by continued demand for our TRUFORMA of products as well as sustained demand for our pulse patrols, which comes from both new device installations and reorders associated with existing systems. We expect consumables growth to further compound as our installed base expands. Our international business also continues to perform exceptionally well, with revenue increasing 17% in the second quarter driven primarily by organic demand. And we anticipate that our expanding global business will continue to contribute meaningfully to the sustainable long-term growth of Zomedica. We remain committed to the pursuit of strategic opportunities that leverage our existing asset base and scale to drive incremental value for our shareholders within both the human and animal health sectors. Moving to operating expenses. Total operating expenses for the second quarter of 2026, were $10.1 million, a 20% reduction when compared to prior year. For the year, we are down $5.3 million or 21% after adjusting for a noncash impairment charge taken in the first quarter of 2025. Operating expenses as a percentage of sales improved 75% for the quarter and have improved 79% year-to-date. Reflecting our commitment to disciplined cost management and the realization of scale in which the company has invested. We anticipate continued operating leverage as sales continue to grow across all segments and this growth is supported by our current cost structure. Research and development expenses were down $0.8 million or 43% for the quarter and are down $1.5 million or 41% year-to-date. While spending is down year-to-date primarily as a result of recent product launches, we anticipate that our R&D spend will moderately increase as we continue to develop next-generation offerings and pursue solutions to unmet or underserved market needs. Selling and marketing expenses were down $1 million or 21% for the quarter and $2.2 million or 22% year-to-date while revenue has increased 37% for the quarter and 36% year-to-date. General and administrative expenses were down $0.8 million or 13% for the quarter, bringing savings to $1.6 million or 13% year-to-date when compared to prior year. This continues to reflect disciplined cost management and efficiency gains. Turning to the balance sheet. Zomedica ended the quarter with $44.1 million in cash, cash equivalents and available for sale securities. Cash used during the second quarter was approximately $3.4 million, representing a 38% reduction compared to the cash burn in the second quarter of 2025. This represents our lowest non year-end quarterly cash burn on record since commercialization. Year-to-date cash burn has improved by $3.2 million, reflecting continued fiscal discipline, while supporting top line revenue growth. As always, I would like to remind you, we remain essentially debt-free. Continued top line growth at healthy margins, combined with the operating discipline that has resulted in reduced operating expenses continue to move us towards our goal of cash flow breakeven and GAAP profitability. As evidenced by both the reduced second quarter cash burn and a 59% reduction in our adjusted non-GAAP EBITDA loss. Our results for the quarter continue to illustrate that your company is in strong financial health and making meaningful progress towards cash generation and profitability. Importantly, we believe we are achieving these results while remaining well positioned to fund and support our ambitious growth strategy. I would like to close again by expressing our gratitude for your continued support of and interest in Zomedica. It is an exciting time for the company, and each earnings release provides further evidence of our progress and our commitment to creating and delivering long-term shareholder value. With that, I'd like to give the floor to our CEO, Larry Heaton. Larry?

[Operator Instructions]. Okay. So again, thanks, everyone, for joining us and for your support of Zomedica. I will dive right into the Q&A. And this week, I remember that we asked when you signed in or when you register, if you had any questions for us, and so I'll make sure and grab those as well as the ones that you're entering now into the Q&A section. All right. So the first one. I noticed that you have issued social media mentioning the shortage in eACTH testing at reference labs is there an opportunity here for Zomedica. So a really good question. And this is information that is public because it was made public by the reference labs themselves. And people know this, how material that will be, I guess, we'll have to sort that out. the major reference lab that offers eACTH testing in the United States is a university hospital in New York. And earlier this month, they sent a letter out to all their customers that indicated that due to a back order of the reagents necessary to run the test for eACTH on their ammulite machine that they were not going to be able to run any tests after around the eighth of August, somewhere in there. Maybe it was the fifth or whenever it was and would not be able to begin redoing the test until the reagents were off back order, which they indicated would be in early mid-October. Incidentally, all other reference labs, there's one other university and there's a couple of large companies you've heard of, offer this test somewhat, not the prevalent providers, but they also use the ammulite machine and are also subject to the same backorder. For that matter, we use the ammulite machine in our own R&D. And if we needed that, we'd be a back order, too. But we don't need it. It's not needed for the TRUFORMA device. We use the BAW sensor, as you well know. And as a result, TRUFORMA is not affected by that back order. So when we heard this, we were concerned that our veterinarians out in the United States and Canada would be disadvantaged by not being able to get that eACTH test to run at those reference labs. And so we've reached out. And so has BI Borne Ingelheim in the United States. And so has Bohringer in Canada have reached out to let -- and we've done it through social media. We've done it through e-mails with customers. BI is doing it through their sales force. We're doing it through our sales force. And since this is actually a very prime season for testing horses for -- with eACTH for PPID. It's been a really busy days of August. We have been very busy placing new TRUFORMA of devices in equine practices, both in the United States and Canada. Both from our own efforts and also in collaboration with Borinkheim. It's certainly the case that some of these customers may choose after these research lab or the reference lab is able to come back and start doing them again. Some of the customers might go back to them, you can be sure that we're doing every single thing we can to equip them to be able to do the testing themselves and experience the benefits of having results right there within 15 to 20 minutes as opposed to having to send to a reference lab after first taking the sample, chilling the sample until they get it back to their clinic, freezing the sample, setting a frozen to the reference lab and then waiting for the results. So yes, there is an opportunity there for us, and we are basically all over it. All right. Next one, still on assay. Should we expect to see more than 4 assays. Let me read it exactly. Now that Zomedica is approaching profitability in the TRUFORMA installed base continues to grow. Does the company's strategy for new assay launches need to evolve as well? Should investors expect to see more than the current pace of roughly 4 new assays per year with new assays potentially being introduced throughout the year rather than concentrated toward the end of the year. So it's a good question. I think for 2026 -- well, this year is almost over, right? And for 2027, you should expect essentially the same pace in terms of the rollout of new assays. And this is because we're trying to balance R&D spending with a new assay development. As you heard a little bit earlier from Mike, R&D spending is down about 43%, I think you said, year-over-year. And some of that -- not all the R&D spending goes to TRUFORMA. So as you know, we recently launched the acoustic Muffler and things like that. So we, as you know, are striving to reach cash flow breakeven as soon as we can, targeting fourth quarter of this year and certainly for 2028 -- 2027. We expect for the full year to be profitable. And so we're going to keep that spend down a little bit. I know there's a trade-off, but I think our shareholders are best served by us maintaining that reduced operating expenses and get it to cash flow breakeven as soon as we can. We do have a number of assays that we are rolling out yet this year and into next year. As far as the pacing, it takes about a year to develop an asset. There's kind of a lot to it. I think we -- if you're curious, we have the webinar on TRUFORMA, and I think they go through all the different phases, it takes about a year. And so it's going to take some time to change that cadence. What we'd have to do is start new assay development in different quarters. Certainly, we can do that. We have not done that this year for reasons that we just talked about. But we'll likely get to that in 2027. We'll maybe start in the second quarter, third quarter, fourth quarter, things like that. So that's that.