Total revenue for the third quarter of 2025 reached $6.9 million, a 20‑21% decline from the $8.8 million reported a year earlier. The drop is largely attributable to a 60% year‑over‑year decline in equipment revenue, which fell to $1.4 million, reflecting the challenging international environment and reduced demand for new devices. In contrast, global recurring revenue grew 3% to $5.5 million, indicating that the company’s subscription‑based services are gaining traction and helping to offset the equipment shortfall.
Earnings per share for the quarter were –$0.36, an improvement from –$0.51 in Q3 2024. The narrower loss is driven by disciplined cost management and a higher gross margin on the recurring revenue segment. Gross margin held steady at 60% year‑over‑year, a result of the shift toward higher‑margin recurring contracts and the lower cost base of those services.
Management emphasized that the average gross revenue per device increased to $5,981, the highest since 2022, underscoring stronger utilization of the XTRAC 308 nanometer excimer laser. CEO Dr. Dolev Rafaeli highlighted the historic expansion of CPT codes for the device, which is expected to become effective on January 1, 2027 and should broaden the addressable patient population. CFO John Gillings noted that the revenue decline was driven primarily by the international market, but that domestic recurring revenue growth and improved operating leverage provide a foundation for future upside.
Guidance for the fourth quarter and the remainder of 2025 remains unchanged. Management reiterated expectations of a stronger Q4, citing expanded reimbursement opportunities and increased device deployments. The company’s outlook signals confidence that the upcoming CPT code expansion and continued focus on recurring revenue will drive growth, even as it navigates short‑term headwinds in equipment sales.
Investors reacted negatively to the earnings announcement, with concerns focused on the significant revenue decline and the company’s net loss. However, analysts and management pointed to the modest improvement in profitability metrics, the resilience of recurring revenue, and the long‑term tailwind of CPT code expansion as mitigating factors that could support a recovery in the near future.
The company’s financial health remains a concern, with negative operating and net margins and a low Altman Z‑Score indicating potential distress. Nonetheless, the strategic initiatives—particularly the CPT code expansion and regulatory clearance of new products—provide a foundation for a turnaround if the company can sustain recurring revenue growth and manage international market challenges.
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