EDAP (EDAP) Q2 2025: HIFU Revenue Surges 77% as Focal One Adoption Hits Inflection

August 28, 2025 | By EarningsIQ Research

EDAP’s HIFU platform delivered a breakout quarter, with capital sales and clinical data fueling accelerating adoption across U.S. and international hospitals. The company raised full-year HIFU growth guidance, citing both robust pipeline visibility and expanding reimbursement tailwinds. Investors should watch for continued execution on U.S. procedure growth and emerging multi-indication opportunities, as EDAP positions itself as a category leader in focal therapy.

Summary

• HIFU Platform Drives Growth: Focal One system placements and procedure demand are accelerating, signaling a market adoption inflection.
• Reimbursement and Clinical Data Tailwinds: Improved CMS rates and published studies are expanding access and payer confidence.
• Pipeline Strength and Strategic Funding: Expanded commercial team and EIB financing support multi-year growth and new indications.

Performance Analysis

EDAP’s Q2 2025 results showcase a decisive shift as the company’s high-intensity focused ultrasound (HIFU), a non-invasive prostate cancer therapy, becomes the clear engine of growth. HIFU revenue surged 76.8% year-over-year, driven by nine Focal One capital sales and a 16.1% increase in treatment-driven revenue. Disposable sales, a recurring revenue stream tied to each procedure, also grew 23.9% globally, reinforcing the platform’s utilization expansion.

Gross margin improved to 42.5%, up from 37.5% a year ago, as the business mix continues to shift away from legacy extracorporeal shockwave lithotripsy (ESWL) and distribution lines, which declined 31.2%. Operating expenses rose modestly, reflecting targeted investment in HIFU commercialization and R&D, but operating loss narrowed slightly as revenue scale offset spending. Notably, inventory was reduced to €15.5 million, reflecting improved just-in-time management and higher turnover, while cash decreased due to ongoing investment in HIFU growth ahead of anticipated EIB funding.

• Platform Leverage: HIFU now represents the majority of revenue and margin improvement, validating the strategic pivot.
• Recurring Revenue Expansion: Growth in disposables and procedure volume supports higher-margin, repeatable revenue streams.
• Legacy Drag Managed: Declines in ESWL and distribution are offset by HIFU acceleration, reducing overall business risk.

EDAP’s updated guidance reflects confidence in sustaining high HIFU growth, with non-core segments intentionally deprioritized.

Executive Commentary

Strategic Positioning

1. Focal One Platform Adoption and Pipeline Strength

EDAP’s Focal One HIFU system is gaining traction within major U.S. hospital networks and high-profile international centers, with multi-unit sales to integrated systems like Cleveland Clinic and expansions at Hackensack Meridian and Baptist Health. The company’s commercial team expansion and leadership hires from surgical robotics further reinforce pipeline confidence, as management reports a “stronger” qualified pipeline than a year ago. Notably, the company is seeing increased interest from both academic and community hospitals, a key signal of mainstreaming adoption.

2. Clinical and Reimbursement Validation

Recent publication of the HIFI and FARP studies has provided robust clinical evidence supporting focal therapy, directly influencing payer and hospital adoption. CMS’s proposed 5.6% increase in hospital payment for Focal One HIFU, along with higher relative value units (RVUs) compared to competing prostate ablation modalities, positions EDAP for expanded access and physician engagement. The new CPT code for benign prostatic hyperplasia (BPH), though not yet a commercial driver, opens a pathway for future indication expansion.

3. Multi-Indication Expansion and R&D Investment

EDAP is leveraging its HIFU platform into additional indications, notably with CE marking and limited European launch for endometriosis, and ongoing development in histotripsy, a non-thermal tissue ablation technology. These efforts are supported by the pending €36 million European Investment Bank facility, earmarked for both commercial and clinical expansion. The company’s move to U.S. domestic filer status signals a commitment to transparency and broader institutional engagement.

Key Considerations

This quarter marks a strategic milestone for EDAP as it transitions from niche innovator to a focal therapy market leader, with the following factors shaping its trajectory:

Key Considerations:

• Procedure Growth Moderation: U.S. HIFU procedure growth slowed to 4.8% YoY, with management attributing the deceleration to regional Medicare Advantage authorization hurdles rather than demand erosion.
• Reimbursement as a Growth Catalyst: CMS increases and favorable RVU comparisons are expected to drive both hospital and physician adoption, with management highlighting reimbursement as a “leading indicator” for capital purchases.
• Capital Sales Visibility: Multi-system sales and a strengthened commercial team underpin management’s confidence in pipeline conversion, though Q3 is expected to reflect typical European holiday seasonality.
• R&D-Driven Platform Leverage: Investments in new indications (endometriosis, BPH, histotripsy) aim to expand addressable market and utilization per installed system.

Risks

Key risks include procedure volume volatility tied to payer authorization, particularly with Medicare Advantage, and the potential for reimbursement policy changes or delays in final CMS rulemaking. Competitive pressure from alternative ablation modalities and the slow ramp in new indications (such as BPH and endometriosis) could temper near-term upside. Cash burn remains elevated ahead of EIB facility closing, necessitating continued discipline in working capital and investment pacing.

Forward Outlook

For Q3, EDAP expects:

• Seasonal dip in European capital sales, consistent with historical patterns
• Continued U.S. commercial expansion and procedure growth initiatives

For full-year 2025, management raised guidance:

• Core HIFU revenue growth of 26% to 34% YoY (up from prior 16% to 25%)
• Non-core ESWL and distribution revenue decline of 25% to 30% YoY

Management cited strong pipeline visibility, expanded commercial team, and reimbursement tailwinds as drivers of the raised outlook, while reiterating a focus on accelerating procedure growth and multi-indication development.

• Stronger HIFU pipeline and commercial execution expected to sustain momentum
• Key watchpoint remains U.S. procedure volume reacceleration as payer headwinds abate

Takeaways

EDAP’s Q2 confirms a strategic inflection with HIFU adoption, supported by both clinical and commercial tailwinds, but execution on procedure growth and multi-indication ramp will be critical for sustaining outperformance.

• HIFU Platform Now Core: Focal One is now the company’s primary growth and margin engine, with accelerating adoption in both capital equipment and recurring disposables.
• Execution and Pipeline Depth: Multi-system sales, commercial team expansion, and a robust pipeline support management’s raised growth targets and inflection narrative.
• Forward Watchpoints: Investors should monitor U.S. procedure growth, reimbursement updates, and progress on endometriosis/BPH clinical milestones as key drivers of future upside.

Conclusion

EDAP’s second quarter marks a clear turning point, with HIFU platform adoption and strategic investments driving both top-line acceleration and improved profitability. The company’s raised outlook and pipeline depth support a multi-year growth thesis, but sustained execution on procedure ramp and new indications will be essential for maintaining momentum and unlocking further value.

Industry Read-Through

EDAP’s performance signals a broader shift toward focal, minimally invasive therapies in urology and beyond, as clinical data and reimbursement converge to drive category expansion. The success of Focal One underscores the importance of platform leverage—where capital equipment sales drive recurring disposables and multi-indication utility. Competitors in prostate ablation, endometriosis, and other focal therapy markets should note the accelerating adoption curve, payer receptivity, and the strategic value of robust clinical evidence. Hospitals and payers are increasingly prioritizing technologies that offer both patient quality of life and economic value, suggesting continued momentum for advanced robotics and non-invasive modalities across medtech.

EDAP Healthcare Medical Devices Focal Therapy HIFU Recurring Revenue Reimbursement Prostate Cancer