Exchange: NASDAQ | Sector: Healthcare | Industry: Medical Devices
Q1 2025
Published: Sep 12, 2024
Earnings Highlights
EPS of $-2.64 increased by 80.1% from previous year
Net income of -2.05M
"Transcript not provided in the current dataset." - N/A
HeartSciences Inc (HSCSW) QQ1 2025 Results Analysis: Cash Position Underpins Limited Runway Amid Deepening Losses in Cardiac Diagnostics
Executive Summary
HeartSciences (HSCSW) reported a QQ1 2025 period marked by meaningful operating losses and a lack of reported revenue, underscoring the company’s current stage in commercializing its MyoVista wavECG technology. The quarter shows a net loss of $2.0517 million and an EBITDA cash burn of about $1.996 million, driven by an aggressive investment in research and development and selling, general, and administrative expenditures while revenue recognition remained elusive. The company benefits from a solid liquidity position and a financing inflow that modestly offset operating cash outflows, but the quarterly cash burn highlights the need for either accelerated product adoption, favorable reimbursement dynamics, or additional equity/credit support to sustain operations absent a material uplift in top-line sales.
Looking ahead, the balance sheet portrays a cash-rich stance relative to near-term liabilities, with cash of $4.34 million and total debt of $1.01 million, yielding a net debt position of approximately $(3.33) million. However, with negative operating cash flow continuing and no revenue in the quarter, the market will remain focused on indicators of revenue traction, unit adoption of MyoVista wavECG, and potential strategic partnerships. Management commentary—where available in the dataset—cannot be quoted due to the absence of an earnings call transcript, limiting the ability to anchor qualitative guidance to specific management statements at this time.
Overall, the QQ1 2025 results reinforce a high-risk, high-uncertainty profile typical of early-stage medical-device players: substantial R&D investment, ongoing operating losses, and a fragile pathway to sustainable profitability absent meaningful revenue uptake or favorable reimbursements.
YoY/QoQ context from the dataset shows significant deterioration in gross profit (YoY: -354.05%; QoQ: -262.11%), and a substantial decline in operating income (YoY: -55.99%; QoQ: -10.42%). Net income declined by -50.10% YoY and -11.13% QoQ, with EPS down -2.64 in the quarter.
Research and development: $1.2249 million; SG&A and selling/general/admin expenses combined: $850.736k (and other operating costs bring total operating expenses to $2.0423 million; total cost and expenses: $2.0757 million).
The heavy R&D spend relative to near-term revenue is a primary driver of the quarterly loss, consistent with an early-stage device company focused on product development and regulatory/commercial ramp.
Financial Highlights
Revenue status: Revenue reported as null for QQ1 2025; cost of revenue $33.318k, resulting in gross loss of $33.318k. Gross profit margin not reported.
Profitability and margin dynamics:
- EBITDA: $(1.995) million; Operating income: $(2.076) million; Net income: $(2.0517) million; EPS: $(2.64).
- YoY/QoQ context from the dataset shows significant deterioration in gross profit (YoY: -354.05%; QoQ: -262.11%), and a substantial decline in operating income (YoY: -55.99%; QoQ: -10.42%). Net income declined by -50.10% YoY and -11.13% QoQ, with EPS down -2.64 in the quarter.
Expense structure and drivers:
- Research and development: $1.2249 million; SG&A and selling/general/admin expenses combined: $850.736k (and other operating costs bring total operating expenses to $2.0423 million; total cost and expenses: $2.0757 million).
- Interest expense: $22.526k; Depreciation & amortization: $33.318k; No tax expense reported.
- The heavy R&D spend relative to near-term revenue is a primary driver of the quarterly loss, consistent with an early-stage device company focused on product development and regulatory/commercial ramp.
Cash flow and liquidity:
- Net cash used in operating activities: $(2.018) million; Net cash used in investing activities: $(0.833)k; Net cash provided by financing activities: $0.552 million; Net change in cash: $(1.468) million.
- Free cash flow: $(2.0195) million for the quarter.
- Cash and cash equivalents at period end: $4.3398 million; Total debt: $1.0121 million; Net debt: $(3.3276) million (net cash position due to cash on hand offsetting debt). The company increased common stock issued by $603.746k during the quarter, signaling equity financing activity.
Balance sheet health and leverage:
- Total assets: $8.1919 million; Total liabilities: $2.2574 million; Total stockholders’ equity: $5.9339 million.
- Current ratio: 4.00; Quick ratio: 3.53; Cash ratio: 3.21, indicating solid near-term liquidity despite operating losses.
- Inventory: $0.6430 million; Intangible assets: $1.5901 million; Property, plant and equipment net: $0.5267 million.
- Long-term debt: $0.9057 million; Short-term debt: $0.1064 million; Total debt: $1.0121 million; Retained earnings heavily negative at $(69.4141) million, highlighting accumulated losses over time.
Market and valuation context:
- Existing liquidity provides runway for near-term operations, but the lack of revenue in QQ1 2025 presses the need for accelerating product uptake, partnerships, or additional financing to sustain longer-term operations.
- Industry benchmarks for micro-cap medical-device players typically exhibit higher volatility and dependence on early clinical/regulatory milestones; the current liquidity position is favorable versus the near-term cash burn, but fundamental revenue growth remains the key gap to close.
Income Statement
Metric
Value
YoY Change
QoQ Change
Gross Profit
-33.32K
-354.05%
-262.11%
Operating Income
-2.08M
-55.99%
-10.42%
Net Income
-2.05M
-50.10%
-11.13%
EPS
-2.64
80.05%
3.30%
Key Financial Ratios
currentRatio
4
returnOnAssets
-25%
returnOnEquity
-34.6%
debtEquityRatio
0.17
operatingCashFlowPerShare
$-2.6
freeCashFlowPerShare
$-2.6
priceToBookRatio
0.01
priceEarningsRatio
-0.01
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Management transcript highlights are not available in the provided dataset. The earnings transcript is listed as an empty array, so no direct quotes or thematic quotes can be extracted. Investors should monitor the forthcoming call or filings for management tone on product adoption, reimbursement dynamics, and partnerships once available.
Transcript not provided in the current dataset.
— N/A
Transcript not provided in the current dataset.
— N/A
Forward Guidance
The QQ1 2025 data provide limited explicit forward guidance. Given the absence of reported revenue in QQ1 2025 and ongoing operating losses, investors should look for explicit revenue targets, timelines for MyoVista wavECG commercialization, and any guidance on cost controls. Near-term factors to monitor include:
- Revenue trajectory for the wavECG line, including enterprise/payer reimbursement plans and clinic adoption rates.
- Additional licensing, co-development, or manufacturing partnerships that could de-risk R&D expenditure while accelerating commercialization.
- The cadence of potential equity financing or debt facilities to support working capital during the commercialization phase.
- Operating expense discipline and any anticipated reductions in SG&A or R&D as product milestones are achieved.
Overall, the achievability of a path to profitability hinges on a meaningful uplift in revenue coupled with controlled operating costs; absent a clear revenue ramp, the investment risk remains elevated.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
HSCSW Focus
0.00%
0.00%
-34.60%
-0.56%
HSCS
0.00%
0.00%
-34.60%
-36.50%
CLPT
59.20%
-55.40%
-12.00%
-10.33%
LUCD
-1.16%
-10.78%
-89.20%
-95.20%
PAVM
-1.31%
-13.90%
22.10%
-29.20%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Base case: Revenue ramp-through adoption and payer reimbursement would gradually offset the operating losses, supported by continued equity financing if needed. Given the QQ1 2025 results, investors should monitor the revenue traction of wavECG, cost containment measures, and any partnership activity that could de-risk the burn and extend the liquidity runway. Upside potential exists if commercialization accelerates and gross margins improve as scale is achieved; downside risk includes continued negative cash flow and potential equity dilution to fund operations. The current EV/enterprise value and price-to-book metrics imply a micro-cap, high-volatility profile; a wait-and-see stance is prudent until tangible top-line progress is demonstrated.
Key Investment Factors
Growth Potential
Moderate to high potential if MyoVista wavECG achieves practical adoption in clinics, urgent care, and hospital settings, aided by payer reimbursement and clinical endorsements. Upside hinges on regulatory milestones, favorable reimbursement, and scalable manufacturing.
Profitability Risk
Key risks include continued lack of revenue recognition in QQ1 2025, outsized R&D and SG&A burn relative to sales, dependence on a single product line, execution risk in clinical adoption, potential need for additional capital, and competitive intensity in the cardiovascular diagnostics device market.
Financial Position
Liquidity is solid on a cash basis (cash and cash equivalents of ~$4.34M with total debt ~$1.01M, resulting in a net cash position). However, negative operating cash flow and lack of revenue imply a fragile near-term financial trajectory without operational improvements or external financing.
SWOT Analysis
Strengths
Strong near-term liquidity with approximately $4.34 million in cash and a modest debt burden (~$1.01 million).
Intangible assets and IP related to cardiovascular diagnostic technology (MyoVista wavECG) position HeartSciences in a niche medical device space.
Low current liabilities relative to assets (healthy current ratio ~4.0) providing cushion while pursuing revenue growth.
Weaknesses
No reported QQ1 2025 revenue; substantial quarterly losses (net income $(2.05) million; EBITDA $(1.996) million).
High ongoing R&D and SG&A spend with limited near-term topline traction, increasing burn risk absent revenue acceleration.
Dependence on a single product line with regulatory/commercial uncertainties; negative retained earnings historically.
Inventory levels appear modest but the lack of receivables data suggests limited near-term cash collection dynamics.
Opportunities
Potential adoption of wavECG in clinics, doctors’ offices, urgent care, and hospitals as a resting ECG diagnostic tool.
Strategic partnerships, licensing, or distribution agreements to accelerate adoption and reduce go-to-market costs.
Reimbursements and clinical evidence could unlock broader payer acceptance and higher utilization.
Threats
Intense competition in cardiovascular diagnostics with established players.
Regulatory delays or adverse reimbursement developments could stall revenue growth.
Need for additional capital to fund ongoing losses and working capital; equity dilution risk for existing holders.