Profound Medical (PROF) Q1 2025: Tulsa Revenue Jumps 82% as CAPTEN Trial Drives Adoption Pipeline
Profound Medical’s Q1 saw revenue surge on Tulsa adoption, catalyzed by CAPTEN trial data and expanded reimbursement access. The company’s transition to a capital sales model and new AI-driven modules are reshaping its commercial trajectory, with back-end loaded growth expected as pipeline momentum builds into year-end.
Summary
- CAPTEN Trial Data Unlocks Adoption: Level 1 head-to-head results against robotic prostatectomy are accelerating physician interest and pipeline expansion.
- Reimbursement and Capital Model Shift: New CMS level 7 codes and Tulsa Plus turnkey solutions are changing buying behavior and sales pacing.
- AI-Driven BPH Module Broadens TAM: Launch of the Tulsa AI volume reduction module positions Profound to address a larger patient base and streamline workflows.
Performance Analysis
Profound Medical delivered an 82% year-over-year revenue increase in Q1 2025, with $2.6 million in total revenue, of which $1.8 million was recurring and $820,000 came from capital equipment sales. Gross margin improved to 71% from 60% a year ago, reflecting both higher sales and favorable product mix. However, operating expenses rose sharply to $13 million (from $8.7 million), driven by R&D investment and ramping SG&A to support the commercial buildout.
The company posted a net loss of $10.7 million, widening from $6.6 million in the prior year period, as Profound invests ahead of expected adoption. Capital equipment revenue primarily reflected two new site installations and one conversion, supporting the narrative that the commercial model is pivoting from placements to upfront capital sales and recurring disposables. Cash stood at $46.4 million at quarter end, providing a runway for ongoing commercialization efforts.
- Revenue Growth Driven by Tulsa Procedures: Recurring revenue accounted for nearly 70% of total sales, signaling growing procedure volume and utilization.
- Margin Expansion Reflects Product Mix Shift: Higher gross margin demonstrates improved leverage as Tulsa adoption scales and capital sales increase.
- Elevated OpEx Signals Strategic Investment: Increased spend is tied to salesforce expansion, clinical education, and product development, supporting future growth.
Management remains confident in achieving 70% to 75% full-year growth, but expects revenue realization to be back-end loaded as the capital model and new reimbursement codes gain traction through 2025.
Executive Commentary
"Tulsa's precision, flexibility, and resulting TAM in prostate disease is unmatched by any competing technology. The clinical data from CAPTEN will be presented at urological conferences every year for the next 10 years as it is the most comprehensive trial done yet and the first level 1 data for prostate care."
Dr. Arun Manawat, Chief Executive Officer
"Q1 is in line with the range that we had mentioned of 70 to 75% growth compared to 2024. The transition from a placement model...to a capital model here in 2025, would lend us all to know that it's going to be a back-end loaded operation."
Tom Tamburino, Chief Commercial Officer
Strategic Positioning
1. Level 1 Evidence as a Commercial Catalyst
The CAPTEN trial delivered the first randomized head-to-head data versus robotic prostatectomy, showing statistically significant superiority for Tulsa in perioperative outcomes. This is a pivotal moment: teaching hospitals and high-volume centers are now engaging, and the trial’s status as the most comprehensive in prostate care history will drive guideline inclusion and insurer awareness. Physician feedback at the AUA meeting was described as “far better than anticipated.”
2. Capital Sales and Tulsa Plus Model
Profound is shifting from a placement model to capital sales, supported by the Tulsa Plus turnkey solution, which bundles the Tulsa Pro device with MRI (magnetic resonance imaging) hardware and ancillary equipment. The launch of CMS level 7 reimbursement codes in January 2025 enables financially viable adoption across hospitals, ambulatory surgical centers (ASCs), and office settings. This transition is expected to make revenue more back-end loaded, as sales cycles lengthen but deal sizes and recurring revenue potential increase.
3. AI-Powered BPH Module and Market Expansion
The new Tulsa AI volume reduction module for BPH (benign prostatic hyperplasia) leverages AI to automate and accelerate procedure workflows, enabling predictable scheduling and higher throughput. This expands the total addressable market (TAM) and allows facilities to “stack” procedures efficiently. Limited release begins in June, with full rollout planned for Q4, positioning Profound to capture share in the large and growing BPH treatment segment.
4. Reimbursement and Pipeline Momentum
With CMS reimbursement now live and private payers increasingly pre-approving Tulsa procedures, Profound’s pipeline is growing, especially as awareness spreads among both patients and providers. The company is seeing increased patient inquiries, and early Medicare billing data indicate that hospitals are being paid, supporting confidence in the commercial ramp.
Key Considerations
This quarter marks a strategic inflection for Profound, as the company leverages clinical evidence, reimbursement tailwinds, and new product innovation to drive adoption and revenue growth. Investors should monitor the following:
Key Considerations:
- CAPTEN Data Drives Guideline Momentum: Level 1 evidence is expected to accelerate mainstream adoption and influence payer policy over the next several years.
- Capital Model Shifts Sales Timing: Transition to upfront capital sales creates lumpier revenue but increases long-term recurring revenue from disposables and service.
- AI Module as a TAM Expander: The BPH-focused AI module could make Tulsa relevant to a broader segment of urology, supporting higher utilization per site.
- Reimbursement Clarity Reduces Barriers: Level 7 CMS codes, higher than peer technologies, support adoption across diverse care settings and improve economic justification for customers.
Risks
Profound faces execution risk in scaling its commercial team and converting pipeline into capital sales, particularly as the model shift may delay revenue recognition. Adoption is also contingent on continued payer acceptance, as well as the pace at which guidelines incorporate Tulsa. Elevated operating expenses and a widened net loss highlight the need for disciplined cash management if commercialization is slower than anticipated. Competitive responses from established prostate technologies and potential delays in AI module rollout could also impact momentum.
Forward Outlook
For Q2 and the full year 2025, Profound guided to:
- Full-year revenue growth of 70% to 75% over 2024, with a “back-end loaded” profile as capital sales accelerate in the second half.
- Continued margin expansion as recurring revenue and capital equipment mix improve.
Management highlighted several factors that will drive the outlook:
- CAPTEN trial data dissemination at major conferences to support guideline and payer engagement.
- Limited launch of the Tulsa AI BPH module in Q2, with full commercial rollout in Q4.
- Ongoing buildout of commercial teams and increased marketing, including patient and physician outreach campaigns.
Takeaways
Profound is leveraging clinical validation and reimbursement expansion to drive a new phase of commercial growth, with the Tulsa platform positioned to disrupt the prostate disease treatment landscape.
- CAPTEN Data as Adoption Catalyst: Level 1 evidence is increasing physician and institutional engagement, supporting pipeline growth and future guideline inclusion.
- Commercial Model Shift Increases Recurring Revenue Potential: The move to capital sales and turnkey solutions should drive higher utilization and long-term margin leverage, even as near-term revenue is back-end weighted.
- AI-Driven Expansion and Reimbursement Clarity: The BPH module and CMS level 7 codes expand addressable markets, while execution on pipeline conversion and cash discipline remain critical watchpoints for investors.
Conclusion
Profound Medical’s Q1 marks a pivotal step in its transition from clinical validation to commercial scaling, with CAPTEN trial data, reimbursement tailwinds, and AI-driven product innovation underpinning a robust, if back-loaded, growth outlook for 2025. Investors should watch for evidence of pipeline conversion and execution on commercial milestones in the coming quarters.
Industry Read-Through
The success of the CAPTEN trial and rapid CMS reimbursement adoption signal a new competitive bar for prostate disease technologies, underscoring the growing importance of randomized head-to-head data for payer and guideline inclusion. Profound’s AI-driven workflow automation and turnkey capital solutions highlight a broader medtech trend toward integrated, outcome-based product offerings, with implications for both device manufacturers and imaging partners. As reimbursement clarity accelerates adoption, other device innovators in urology and adjacent specialties may face pressure to deliver similar evidence and bundled solutions to remain competitive.