0001464521-26-000071
SEC filingRevenue grew 41% to $52.6M, gross margin expanded to 80%, and net loss narrowed 15% as revenue case volume surged 67%.
For the three months ended March 31, 2026, Heartflow reported revenue of $52.6 million, a 41% increase from $37.2 million in the prior-year period. The growth was driven by a 67% surge in revenue case volume to 67,443, partially offset by a reduction in average selling price due to an increasing mix of clinic/office-based accounts (36% of U.S. revenue cases vs. 30% a year ago) and higher volume rebates. Gross profit rose 51% to $42.2 million, yielding a gross margin of 80%, up from 75% in Q1 2025. The margin expansion was attributable to production team productivity improvements from AI efficiency initiatives and higher volume, despite ongoing investment in hiring and training.
Operating expenses increased 60% to $71.7 million. Research and development expenses grew 55% to $21.6 million, driven by a $6.1 million increase in personnel costs from headcount growth and higher consulting fees, partially offset by lower clinical trial expenses. Selling, general and administrative expenses rose 35% to $42.6 million, reflecting increased headcount costs ($8.4 million), professional fees, travel, and marketing. An asset impairment charge of $7.5 million was recorded for the Mountain View facility sublease. Net interest income swung to $2.5 million from an expense of $4.6 million due to full repayment of the 2024 Term Loan in August 2025. Other expense net fell to $0.3 million from $10.3 million, as prior-year charges from warrant and derivative fair value adjustments did not recur. Net loss improved 15% to $27.4 million.
Heartflow operates as a single segment: the Heartflow Platform, which includes FFR CT Analysis, Plaque Analysis, RoadMap Analysis, and the recently launched PCI Navigator. Substantially all revenue is usage-driven on a per-case basis. FFR CT Analysis remains the commercial foundation, representing 98% of cumulative revenue. Plaque Analysis is in early commercialization with limited payer coverage (five of seven MACs). The company expects revenue case growth from new account additions and increasing utilization at existing accounts. Office/clinic-based accounts now comprise 36% of U.S. revenue cases, a trend expected to continue, albeit at lower pricing per case. No single customer exceeded 10% of revenue, indicating low concentration risk.
Management expects to continue investing in R&D, including three randomized clinical trials starting in the second half of 2026 to expand indications. SG&A will increase to support commercial growth and public company costs but is expected to decline as a percentage of revenue over time. Gross margin is anticipated to improve long-term through AI-driven automation and Plaque Analysis contribution, though near-term fluctuations may occur due to hiring and training. Based on current cash of $254.9 million and expected revenue from customers, the company believes it has sufficient liquidity for at least 12 months. No specific forward guidance was provided; the focus remains on driving adoption of the CCTA+Heartflow pathway and expanding new products like Plaque Tracker (expected launch in 2027).
As of March 31, 2026, Heartflow's liquidity position is strong with $254.9 million in cash, cash equivalents, and available-for-sale investments. The company holds no debt following the full repayment of the 2024 Term Loan ($60.1M) and conversion of the 2025 Convertible Notes ($98.3M) into equity upon the IPO in August 2025. Cash and equivalents stand at $19.7M, with short-term investments of $138.6M and long-term investments of $96.6M. Total stockholders' equity is $285.7M, accumulated deficit $1.12B.
The company has $6.0M in open purchase commitments for goods and services over the next three years, and $0.3M in minimum royalty commitments under technology license agreements (annual minimum $50k). Operating lease obligations total $31.6M in undiscounted payments, with a present value of $26.3M. No other material contingent liabilities are accrued.
No share repurchases or dividends were declared or paid in Q1 2026. Capital expenditures were $1.9M (3.6% of revenue), primarily for property, equipment, and capitalized internal-use software. Debt activity was nil as all previous obligations were resolved prior to the quarter.
Heartflow operates as a single reportable segment: non-invasive CAD detection solutions. Geographic revenue breakdown: United States $49.0M (93.2% of total) and Rest of World $3.6M (6.8%). Segment profit measure is consolidated net loss ($27.4M), with significant expenses including cost of revenue ($10.4M), R&D ($21.6M), SG&A ($42.6M), and asset impairment ($7.5M).
Net loss was $27.4M in Q1 2026, up from $32.3M in Q1 2025, but operating cash flow worsened to -$30.1M from -$13.2M. The divergence is due to significant non-cash charges: stock-based compensation ($6.6M vs $2.5M), asset impairment ($7.5M), and depreciation/amortization ($1.4M). Working capital was a large use of cash, with accounts receivable increasing $6.2M, prepaids rising $3.9M, and accrued expenses decreasing $7.4M.
Capex of $1.9M (1.9% of negative CFO) is moderate. No free cash flow is reported, but implied FCF (CFO minus capex) is -$32.0M. The company did not pay dividends or repurchase shares, relying on equity issuance ($3.3M from options, $3.3M from ESPP) to partially offset cash burn. The cash balance dropped 49% to $24.4M from $49.5M at year-end. Anomalies include a $30M maturity of investments offset by $29.5M purchases, and a $912K non-cash capex item in accounts payable. Overall, cash generation remains weak with high operating cash burn.