Nano X Imaging (NASDAQ:NNOX) held its fourth-quarter earnings conference call on Monday. Below is the complete transcript from the call.
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Summary
Nano X Imaging reported a GAAP net loss of $33.4 million for Q4 2025, an increase from the previous year, attributed largely to an impairment of long-lived assets and increased sales and marketing expenses.
The company signed agreements to deploy 300 Nanox ARC systems over three years with Howard Technology Solutions and additional agreements for 360 systems across multiple markets, indicating a strategic shift towards scaling business operations.
Revenue targets for 2026 are set at $35 million, with significant growth expected in the second half of the year as deployment and commercial agreements mature.
Operational restructuring in Korea is underway, including closing the chip manufacturing line and shifting to international manufacturing partners to reduce costs and improve efficiency.
Management changes include the departure of CFO Ron Daniel and the appointment of Guy Nettensome, aimed at bolstering financial leadership as the company scales operations.
Full Transcript
OPERATOR
Ladies and gentlemen, thank you for standing by. Welcome to the Nano X Imaging fourth quarter 2025 earnings call. At this time, all participants are in a listen only mode. After the speaker’s presentation, there will be a question and answer session. To ask a question during the session, you would need to press star 11 on your telephone. You would then hear an automated message advising that your hand is raised. And to withdraw your question, please press Star one one again. Please be advised that today’s conference is being recorded. I would like now to turn the conference over to Mike Cavanaugh, Investor Relations. Please go ahead.
Mike Cavanaugh (Investor Relations)
Good morning and welcome to the Nano X Imaging fourth quarter 2025 investor call. Earlier today, Nano X Imaging Limited released financial results for the quarter ending December 31, 2025. The release is currently available on the Investors section of the Company’s website. With me today are Erez Meltzer, Chief Executive Officer and Acting Chairman, and Ron Daniel, Chief Financial Officer. Before we get started, I would like to remind everyone that management will be making statements during this call that include forward looking statements regarding the Company’s financial results, research and development, manufacturing and commercialization activities, regulatory process and clinical activities, among other matters. These statements are subject to risks, uncertainties and assumptions that are based on management’s current expectations as of today and may not be updated in the future. Therefore, these statements should not be relied upon as representing the company’s views as of any subsequent date. Factors that may cause such a difference include, but are not limited to, those described in the Company’s filings with the securities and Exchange Commission. We will also refer to certain non GAAP financial measures to provide additional information to investors. A reconciliation of the non GAAP to GAAP measures is provided with our press release, with the primary differences being non GAAP net loss attributable to ordinary shares, non GAAP cost of revenue, non GAAP gross profit, non GAAP gross profit margin, non GAAP research and development expenses, non GAAP sales and marketing expenses, non GAAP general and administrative expenses, and non GAAP gross loss per share. With that, I’d now like to turn the call over to Erez Meltzer.
Erez Meltzer (Chief Executive Officer and Acting Chairman)
Thank you, Mike, and thank you all for joining us today. In the fourth quarter of 2025, we continued to move the business forward across multiple fronts. While our primary focus remains on expanding our commercial presence. Given the current geopolitical situation, we spent a lot of effort during the quarter and the beginning of 2026 to secure our supply chain and strengthen our financial positions as well. On top of that, we made good progress advancing the capabilities of Nano X’s platform and strengthening the operational infrastructure needed to support our long term growth. I’m happy to report that we recently entered into an agreement with Howard Technology Solutions, a division of Howard Industries, which has a national reach and an established presence in healthcare and public sector markets, providing us with a scalable framework for expanding nanox ARC deployment. This agreement reflects our confidence in the commercial demand for the Nano X ARC and our ability to engage partners that can support sustained growth in system placement across the US under the framework of this agreement, Howard is expected to deploy 300 Nanox arc systems over a three years period, of which 60 are indicated to be deployed in the first year. We also recently announced multiple commercial agreements which together accumulates to roughly 360 systems over a two to three years period. These partnerships expand our reach across imaging centers and specialty care settings where point of care imaging is integral to clinical workflow and patient management. This represents a fundamental shift in how we’re poised to scale our business from providing our technology to deploying in a meaningful volume, shifting toward a growing CAPEX portion. This is what we see as getting us closer to our indicated revenue of 2026. The framework has the potential to become a meaningful contributor over time and gives us confidence in our ability to convert our robust pipeline into revenue as we move forward. We view this as continued momentum and see ourselves moving closer to an inflection point. We observed a clear shift in the market perception at major radiology conferences including RSNA in the US and ECR in Europe, where engagement and inbound interest increased meaningfully. We have also taken important steps to strengthen our operational foundation. A key component of this initiative is the restructuring of certain activities in our Korean manufacturing facility in order to reduce our Korean operation, OPEX and cash burn and improve efficiency while maintaining our supply of nanox ARC system components. We are very pleased with the progress we have made recently, but it is clear that the pace of deployment continues to be influenced by various external processes including import licenses, construction timelines and regulatory requirements in certain markets. These steps take time to complete and while we are not setting time with the pace and would like to see deployments more faster, this reflects the current operating reality across multiple markets. We expect that many of these processes will be streamlined as additional sites move through the pipeline. Introducing new technology of any kind into a medical environment is always complex process. It requires alignment across clinical workflow, regulatory framework and operational infrastructure as well as changing behaviors which all takes time to achieve. While this can slow down the early stages of deployment, it is also a natural part of introducing innovative technology into the healthcare systems. Turning to revenues, we continue to target $35 million in revenue for the full year of 2026 based on the execution of our current plans. Today, as part of the above mentioned, we have signed commercial agreement which we believe could result in present and future placements of about 400 systems globally over the next 23 years. Of this, approximately 38 systems are currently at various stages of deployment, including demonstration, commercial installation and systems pending construction and or regulatory approval. In addition, There are approximately 15 systems that are expected to be installed over the next few months as part of our NAS imaging network. That said, it is important to emphasize that our current revenue base remains at an early stage and part of this deploy base is not generating revenues and the pace of REMPROP will depend primarily on on the timing of system activation, their transition into a revenue generating operation and the impact of the deployment by the business partners. As more systems move into operation and utilization increases, we expect revenue to build accordingly. However, the exact timing of this trend may vary and always depending on the deployment process and progress and our factors. I will now provide some additional color on the Korea restructuring that I referenced in my opening remarks. Recently we adopted a restructuring plan designed to better align our manufacturing cost structure with our long term financial model, support our path toward improved gross margin and align our manufacturing capabilities with the company’s strategic priorities. As part of this plan and our broader cost reduction efforts, we are closing our chip manufacturing line in South Korea, downsizing our fabrication facilities and shifting production to established international manufacturing partners including sisam, a Switzerland based manufacturing partner. We currently hold substantial amateur inventory which we plan to work through as we transition to a more efficient outsourced production model better aligned with current and projected demand. With these actions, we expect to reduce structural and overhead costs, lower our cash burn and enhance overall operation efficiency. With that overview, let’s now take a detailed look at at our various business segments starting with the US Deployment. Beyond the hardware agreement, we also recently announced a distribution agreement with Imperial Imaging Technology, a US based provider of diagnostic imaging solution, to support rollout across the Southeast, particularly in orthopedic focused environment where there is strong demand for a point of care imaging. In addition, we signed agreements with distributors such as Integrity Imaging, a US based provider of medical imaging solutions with established relationship across imaging centers and healthcare providers Elite Surgical, which serves surgical and specialty care environments Digital X Ray Imaging, a leading diagnostic imaging provider with deep regional present across Arkansas and most recently a collaboration with Nu dx, an imaging solution provider focused on expanding access to diagnostic imaging and radiology oncology system to support all to support the deployment of nanox ARC systems, these collaborations aim to strengthen our distribution capabilities by adding sales resources and on the ground present expands our geographic coverage and we believe it is the potential to become a meaningful contributor to revenues over time. In parallel, we remain in active discussion with additional partners reflecting continued interest from medical equipment providers and likely further expansion of our U.S. pipeline. Alongside our channel strategy, our U.S. direct sales team on the ground continues to make progress in targeted clinical segments. For example, we recently signed an agreement with Regional Sports Medicine in Orthopedic Group, our first orthopedic practice customer in the United States. This represents an important step into a segment where imaging plays a central role in diagnostic and treatment decisions and where providers benefit from having imaging available on site. Orthopedics remain a high volume and imaging driven specialty with a strong incentives to retain imaging in house. Additionally, we are advancing the nanox Imaging Network, a focused initiative designed to build a network based imaging services model in the US this initiative targets segments such as the workers compensation and specialized care reimbursement dynamics may support higher per scan pricing. We are currently deploying already systems across a number of sites in the U.S. under this model, Nanox support Nanox arc system deployment, maintenance and connectivity while our partners manage site operation and local engagement. While still in the very early stage, we believe this initiative can become an important component of our long term commercial strategy as utilization increases and the model is further validated. To provide additional context around this shift in engagement, were participated in two major industry events during the period at RSNA, the world’s largest annual radiology conference held in the U.S. our booth featuring live demonstration of the NanoPSR system saw strong interest throughout the event at the European Congress of Radiology, the largest radiology conference in Europe, we showedcases the nanox ARC live in Europe for the first time and presented new clinical and AI data. Engagement levels were high, reflecting growing awareness of the system’s clinical value and its potential role in routine imaging workflow. We were also proud to receive the Red Dot award for product design 226 for the Nanox ArcX prestigious international recognition that reflects the maturity, usability and clinical readiness of our platform. Let’s now turn to work outside of the U.S. as I mentioned earlier regarding ECR, we were also honored to receive …
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