Profound Medical (PROF) Q3 2025: Tulsa Pro Revenue Jumps 87% as BPH AI Launch Expands TAM
Profound Medical posted an 87% year-over-year revenue surge, powered by accelerating Tulsa Pro adoption and the launch of its AI-driven BPH module—unlocking a tripling of addressable market. Margin expansion and a robust pipeline support the company’s path to profitable growth, as reimbursement tailwinds and upcoming clinical data set the stage for broader payer coverage and further commercial momentum into 2026.
Summary
- BPH AI Module Triples TAM: New software expands Tulsa Pro’s reach to benign prostatic hyperplasia, unlocking significant volume upside.
- Margin Expansion Validates Model: Gross margin climbs to 74%, reflecting scale and efficiency in both capital and consumables.
- Pipeline and Reimbursement Catalysts: Strong sales funnel and Medicare/commercial payer progress underpin confidence in sustained high growth.
Performance Analysis
Profound Medical delivered a transformative quarter, achieving 87% revenue growth and a step-change in commercial execution. The company’s Tulsa Pro platform, a minimally invasive MRI-guided ultrasound ablation system for prostate disease, is now installed at 70 sites, with a pipeline of 93 more in late-stage sales negotiation. Gross margin expanded to 74%, up from 64% a year ago, driven by increased procedure volume, operational leverage, and a balanced mix of capital and recurring revenue from disposables.
Utilization accelerated in Q3 and has continued into Q4, supported by the recent pilot and pending full launch of the Tulsa AI volume reduction module for BPH (benign prostatic hyperplasia). This software upgrade enables faster, more flexible procedures, positioning Tulsa Pro as a competitive alternative to mainstream BPH treatments and expanding the total addressable market (TAM) by 400,000 patients annually. Medicare reimbursement is now consistently realized, with commercial payer rates ranging from $25,000 to $65,000 per case at select sites, materially boosting contribution margins and validating the business model’s scalability.
- Sales Pipeline Strength: 93 systems in advanced sales stages offer high visibility into near-term growth.
- Reimbursement Tailwinds: Category 1 CPT code and positive Medicare/Medicare Advantage payments are driving adoption, with commercial coverage progressing case-by-case.
- BPH Expansion Impact: AI-driven workflow unlocks new procedure types and “Tulsa days,” supporting higher site utilization and hospital efficiency.
Profound’s commercial inflection is underpinned by clinical momentum, upcoming trial data, and a disciplined focus on high-volume urology centers. The company’s flexible pricing and partnership models further support market penetration and international expansion.
Executive Commentary
"We now know how to sell TELSA programs. As I have presented earlier this week at the Stifel Conference, we believe we are now on a path to not just grow, but profitably grow. The math to achieve this target is simple... With just 200 TELSA programs... we would be at 55 million in procedure revenue, about 10 million in annual service revenue, and selling 40 Tulsa Pro systems per year at 500,000, 20 million in new capital revenue. That will put us around 85 million annual revenue with 70% growth margin already achieved, we would be profitable well before that."
Arun, President and CEO
"Our gross margin also improved significantly, reaching 74% compared to 64% last year. This reflects the growing efficiency and scale of our commercial operations. As of now, we have 70 Tulsa Pro sites. And the company's Tulsa Pro qualified sales pipeline is also growing and currently stands at 93 new systems being classified within one of the verify, negotiate, and contracting stages, which are the final three phases of our sales process."
Tom, Chief Commercial Officer
Strategic Positioning
1. Tulsa Pro Platform: Multi-Indication Expansion
The Tulsa Pro system’s expansion into BPH via AI-powered software marks a strategic leap, enabling treatment of both cancer and benign conditions in a single workflow. This dual-indication flexibility not only increases utilization per site but also cements Tulsa Pro’s value proposition to hospitals seeking efficient, versatile solutions. The ability to treat both prostate cancer and BPH patients on the same day, with no overnight stay and minimal adverse events, is a clear differentiator.
2. Reimbursement and Payer Coverage Momentum
Securing Category 1 CPT code status and consistent Medicare payment has transformed the U.S. commercial landscape, shifting the business from a cash-pay model to broad insurance accessibility. Commercial payers are now reimbursing at multiples of Medicare rates, and management expects regional and national coverage decisions to begin in mid-2026, supported by robust clinical data and ongoing guideline submissions.
3. Commercial Model and Pipeline Discipline
Profound’s “25 for 200” program and capital/disposable pricing structure de-risk hospital adoption, allowing rapid breakeven and committed procedure revenue. The pipeline’s 93 late-stage accounts are highly vetted, with management projecting over 50% close rates, rising as salesforce experience grows. This disciplined approach provides strong forward visibility and underpins confidence in sustained double-digit growth.
4. Sonaleve Platform: Non-Prostate Growth Option
Sonaleve, Profound’s MR-guided focused ultrasound platform for gynecological and oncological applications, is gaining attention as a second growth engine. With 10 operational sites and over 4,000 patients treated globally, Sonaleve is poised for increased investment and commercial focus, particularly as interest in MR-guided interventions rises following sector M&A activity.
Key Considerations
Profound’s Q3 marks an inflection in both scale and strategic optionality. The business is now leveraging clinical validation, payer tailwinds, and operational leverage to accelerate adoption and expand its addressable market.
Key Considerations:
- BPH Module as Growth Catalyst: The AI-driven BPH workflow positions Tulsa Pro to compete directly with mainstream treatments, expanding TAM and supporting higher site utilization.
- Payer Coverage Progression: Medicare and Medicare Advantage reimbursement is now routine, while commercial payer wins at premium rates are increasingly common—setting up for broader coverage decisions in 2026.
- Sales Execution and Pipeline Visibility: A robust pipeline of 93 late-stage accounts and a disciplined sales process provide high confidence in continued install base expansion.
- Margin Sustainability: Gross margin in the low-70% range is expected to persist, with balanced capital and recurring revenue streams supporting profitability targets.
- Sonaleve as Optionality: Renewed focus on Sonaleve, with international partnerships and clinical momentum, offers a second vector for long-term growth.
Risks
Key risks include the pace and breadth of commercial payer adoption, as broader coverage is not yet universal and remains case-by-case. Clinical guideline inclusion and peer-reviewed data publication are critical near-term catalysts—delays or negative readouts could slow momentum. International expansion requires careful resource allocation, and competitive technologies or shifting reimbursement landscapes could challenge growth assumptions.
Forward Outlook
For Q4, Profound Medical guided to:
- Install base target of at least 75 Tulsa Pro sites by year-end
- Continued double-digit percentage growth in BPH procedures
For full-year 2025, management maintained guidance:
- 70% year-over-year revenue growth
- Gross margin in the low-70% range
Management highlighted several factors that will drive results:
- Full commercial launch of the Tulsa AI BPH module at RSNA and additional clinical data reveals
- Progress toward broader commercial payer coverage and ongoing sales pipeline conversion
Takeaways
Profound Medical’s Q3 performance signals a commercial inflection, with the Tulsa Pro platform’s expansion into BPH, robust pipeline, and payer progress underpinning a credible path to profitable growth.
- Clinical and Commercial Synergy: The convergence of AI-driven workflow, positive reimbursement, and strong clinical outcomes is driving adoption and utilization gains.
- Margin and Pipeline Strength: Gross margin expansion and a disciplined sales pipeline provide operational leverage and forward visibility.
- 2026 as a Pivotal Year: Investors should watch for guideline inclusion, national payer coverage, and Sonaleve traction as catalysts for sustained high growth.
Conclusion
Profound Medical enters 2026 with momentum, leveraging its expanded Tulsa Pro platform, strong reimbursement tailwinds, and pipeline visibility to pursue profitable growth. The company’s strategic focus on AI-enabled workflow and payer engagement positions it as a differentiated player in the evolving landscape of image-guided interventions.
Industry Read-Through
Profound’s results provide a read-through for the broader medtech and image-guided intervention space: Clinical workflow innovation, payer alignment, and AI-driven treatment planning are becoming essential for adoption. The shift from cash-pay to reimbursed procedures is a key inflection for any new technology. Competitors in BPH, prostate cancer, and MR-guided ablation should note the accelerating convergence of clinical data, operational efficiency, and payer economics as the new standard for market entry and growth. The growing interest in non-incisional, MR-guided therapies—spanning both urology and gynecology—signals broader opportunity and intensifying competition for procedural volume at the hospital level.