0001464521-25-000012
SEC filingHeartflow's MD&A highlights 40% revenue growth driven by 47% case volume increase, with gross margin declining to 75% due to production hiring.
For the three months ended June 30, 2025, Heartflow recognized revenue of $43.4 million, a 40% increase from $31.1 million in the same period of 2024. The growth was primarily driven by a 47% increase in revenue case volume, partially offset by a reduction in average selling price due to a higher mix of clinic/office-based accounts and increased utilization rebates. Cost of revenue rose 48% to $10.6 million, resulting in a gross margin of 75%, down from 77% in the prior year, as the company invested in hiring and training production personnel to support higher case volumes.
Operating expenses increased 22% to $46.5 million. Research and development expenses grew 51% to $15.0 million, mainly due to headcount additions and clinical trial costs. Selling, general and administrative expenses increased 12% to $31.5 million, driven by higher personnel and software costs. Loss from operations improved slightly to $13.7 million from $14.2 million.
Net loss improved significantly to $9.2 million from $23.4 million, reflecting a $10.6 million gain in other income/expense primarily from a $11.5 million benefit related to derivative liability remeasurement, partially offset by a $0.9 million charge from warrant liability remeasurement.
For the six months ended June 30, 2025, revenue totaled $80.6 million, up 39% year-over-year, with gross margin stable at 75%. Net loss narrowed to $41.5 million from $44.3 million.
Heartflow operates as a single segment, generating substantially all revenue from usage-driven fees for Heartflow FFR CT Analysis (98% of total revenue) and, to a lesser extent, Heartflow Plaque Analysis. Revenue cases have grown sequentially each quarter, reaching 48,423 in Q2 2025. The company is investing in automation to lower cost per analysis over the long term, while expanding its commercial presence in the U.S. and international markets.
Management expects continued investment in production team hiring and training, which may pressure gross margins in the near term, but anticipates margin expansion over the longer term as automation improves. The company completed its IPO in August 2025, generating $332.8 million in net proceeds, and used a portion to repay debt. Heartflow believes its existing cash, together with revenue and IPO proceeds, will fund operations for at least the next 12 months. Strategic priorities include driving adoption of the CCTA+Heartflow pathway, expanding Heartflow Plaque Analysis, and preparing for the launch of Heartflow PCI Planner in 2026.
The company reported a net loss of $41.5M for H1 2025, slightly improved from a $44.3M loss in the prior year. Operating cash flow used was $40.5M, versus $44.7M in H1 2024, representing a 9.5% reduction in cash burn. The primary non-cash adjustments included $4.7M in stock-based compensation, $3.8M in amortization of debt discount and issuance costs, and $2.5M in fair value changes on warrant liability. Working capital changes consumed $11.6M, driven by increases in accounts receivable ($4.9M), prepaids ($2.4M), and other non-current assets ($1.9M). Capital expenditures were $1.9M, down from $3.0M, reflecting lower investment in property and equipment. Free cash flow (CFO minus capex) was negative $42.4M, though no explicit FCF figure was provided. Financing activities generated $71.1M, primarily from a net $72.8M in convertible note proceeds, offset by $2.0M in deferred offering costs and $1.1M in exit fees. The company ended the period with $84.7M in cash, up from $55.8M at the start. No share repurchases or dividends were paid.