I'd now like to turn the floor over to today's host, Jay Jennings, CFO, QT Imaging Holdings, Inc. Please go ahead.
Thank you. Good afternoon. I'm Jay Jennings, the Chief Financial Officer of QT Imaging Holdings, Inc., which is listed on Nasdaq under the symbol QTI. Our mission is straightforward, transforming breast health for every woman. We do this by delivering safe, high-resolution, and cost-effective solutions where the traditional technologies fall short.
Our goal is to replace outdated breast imaging workflows with the first scalable 3D safe imaging platform for dense breast diagnostics and precision breast oncology. QT Imaging began with an FDA-cleared imaging technology. We are now evolving into a commercial quantitative breast imaging platform that combines proprietary hardware, advanced image reconstruction, cloud infrastructure, and over time, AI-enabled clinical applications.
That evolution matters because we're not simply introducing another imaging machine. We are building a platform designed to improve the patient experience, provide physicians with objective and reproducible information, and create value across a growing installed base.
I'll cover some of these important milestones later in this presentation. The current breast imaging pathway has important limitations. Mammography uses ionizing radiation, requires compression, and misses cancers in dense breasts. MRI can be expensive, time-consuming, and uncomfortable, and typically requires contrast.
Conventional ultrasound is highly operator-dependent. Together, these limitations can create fragmented workflows and patient anxiety, recall, and attrition. It is important to note that one in five women of established screening age in the United States are not receiving recommended breast cancer screenings, with screening gaps even greater among women in their 40s.
The industry is ripe for disruption. We are addressing these challenges with a differentiated three-dimensional approach that uses low-frequency sound waves. The exam involves no ionizing radiation, no breast compression, and no contrast injection. It is also operator independent and designed to provide consistent quantitative imaging, particularly for women with dense breasts.
It is important to note that in the United States, approximately half of the women over 40 have dense breasts, and this percentage is even higher internationally. We streamlined what was a multi-step supplemental screening and diagnostic imaging process into a single-step, patient-friendly process with the additional potential to reduce unnecessary biopsies.
The goal is a simpler pathway. One patient-friendly examination that can support supplemental and diagnostic imaging while potentially reducing unnecessary follow-up procedures. For clinicians, the system provides multiple sources of information, including reflection images and quantitative biomarkers such as speed of sound, attenuation, and breast density measures.
For administrators, the model can deliver attractive scan economics, lower labor requirements, and a potential three-year investment recovery at approximately five patients per day. This is one of the rare opportunities in healthcare where the patient, the clinician, and the administrator can all benefit.
The Breast Acoustic CT scanner is FDA-cleared and patent-protected. It uses a CT-like configuration with ultrasound to provide two independent complementary sources of information. Transmission imaging that measures the speed of sound through tissue, and high-resolution reflection imaging that reveals tissue structure and lesion characteristics.
This allows us to deliver MRI-like diagnostic performance in a safer, more scalable, and more patient-friendly platform. The patient experience is equally important. The typical exam takes approximately 10- 12 minutes per breast. It is quiet, comfortable, and suitable for women with dense breasts or implants without the compression associated with mammography or the contrast, noise, and confined environment associated with MRI.
More than 12,000 women have now been imaged using Breast Acoustic CT. That growing real-world experience is an important foundation for broader clinical adoption. The market opportunity is supported by several trends.
Breast density notification is increasing awareness that density affects both cancer risk and the sensitivity of the mammogram. Radiology is leading clinical AI adoption, and oncology is moving toward biomarker-guided personalized treatment and earlier assessment of treatment response. We sit at the intersection of these trends: patient-centered breast imaging, quantitative radiology, and precision oncology.
The 2026 total addressable market is estimated to be approximately $2.5 billion, growing to approximately $3.8 billion by 2030, with the reimbursed segments of the addressable market estimated at $1.7 billion in 2026 and $2.6 billion by 2030.
There are three tailwinds that are positioning us for growth. Regulatory. The FDA has recognized the importance of breast density in breast cancer screening. AI. Radiology is the leading specialty for clinical AI adoption and o ncology, which is moving from one size fits all treatment towards biomarker-guided therapy.
Our near-term sweet spot includes women with dense breasts and women at intermediate or high lifetime risk who may benefit from supplemental imaging. Longer-term, we believe quantitative biomarkers and treatment response monitoring can extend the platform's role in breast cancer care.
We have assembled an impressive clinical advisory board with expertise across breast imaging, breast surgery, and clinical practice, including Dr. Mary Yamashita of USC, Dr. Barry Roseman, and Dr. John Tentinger, who is a Mayo Clinic-trained radiologist and early adopter of our technology.
Our regulatory foundation continues to expand. In addition to our existing FDA clearance, we have received regulatory authorizations in Saudi Arabia, United Arab Emirates, and Israel. In the U.S., the AMA approved a dedicated Category III CPT code X579T for Breast Acoustic CT. The code was released in July, and it will become effective January 1, 2027.
It does not itself guarantee coverage, but it creates a standardized mechanism for reporting, utilization tracking, and evidence generation, an important step on the path towards broader reimbursement and adoption. We also have a number of ongoing clinical studies, which I'll cover next.
At Mayo Clinic, a prospective feasibility study evaluated QTscan against MRI in 26 women at high lifetime risk. Across 52 breasts, the study reported breast level agreement and QTscan identified all lesions considered suspicious on MRI. These pilot findings support the rationale for a larger follow-on study aimed at expanding QT Imaging adoption in high-risk and supplemental screening.
At Cyber Cancer Centre, an ongoing 100-patient program is evaluating QTscan versus MRI and studying quantitative ultrasound findings in relation to treatment response for women receiving neoadjuvant chemotherapy.
The objective is to assess whether quantitative imaging can help evaluate response in days or weeks rather than waiting months. We also completed a multi-site repeatability and reproducibility study. Speed of sound, which is our core tissue biomarker, demonstrated less than 1% variability across scanners under the study conditions.
That consistency is critical for distinguishing biological change from measurement noise and supports the platform's potential for consistent data-driven breast health assessment. Together, these clinical studies are building evidence across supplemental imaging, diagnostic performance, high-risk populations, reproducibility, and treatment response monitoring.
As a reminder, we received regulatory approvals in Saudi Arabia, the UAE, and Israel so far this year. We are also pursuing a CE mark in Europe with a target of the second quarter of 2027.
Our business model begins with hardware revenue and is designed to expand through recurring cloud software and over time, a higher margin AI diagnostic layer. Put simply, hardware gets us in the door, software builds the company. Our go-to-market approach has been primarily distributor-led, giving us broad coverage, capital efficiency, and rapid deployment.
We are now evolving toward a hybrid model. Our direct sales team can lead strategic accounts, enterprise health systems, and key clinical relationships, while distributors continue to provide reach, service, and financing support.
This hybrid approach is intended to increase customer control and support our margin expansion over time. In the United States, we work with NXC Imaging, which is a subsidiary of Canon Medical Systems. Internationally, our partners include Gulf Medical Co. in Saudi Arabia, Al Naghi Medical Co. in the UAE, and Re-Invent Pharma in Pakistan.
The QTI Precision Pathway Cloud platform is the connected layer. It is being developed to support software updates, secure image management, clinical collaboration, quantitative analysis, precision reporting, and future AI-enabled tools. The objective is to preserve the relevance of every installed scanner while increasing its clinical and economic value.
We are demonstrating meaningful commercial scale. Our revenue increased from $4.9 million in 2024 to $18.9 million in 2025. For the first six months of 2026, revenue was $14 million, which was an increase of 116% from the first half of 2025. We shipped 28 scanners, twice the prior year number.
We are affirming 2026 revenue guidance of approximately $39 million, which would represent more than double our 2025 revenue. This guidance remains forward-looking and is based on expected distributor minimum order quantities and contributions from our direct sales. We also strengthened our financial foundation.
During the second quarter, we completed a $10 million underwritten public offering, and we extended the maturity of our $10.1 million senior secured term loan by two years to March 31, 2027. As of August 7, 2026, our cash and restricted cash totaled approximately $14.2 million.
These actions provide additional flexibility for us to invest in commercial expansion, clinical evidence, manufacturing capacity, and product innovation while maintaining disciplined capital allocation. We are also demonstrating strong improvement in our unit economics as the business scales.
With revenue per scanner increasing from $407,000 in 2024 to $473,000 in 2025 to an estimated $488,000 in 2026, all while maintaining gross margins of approximately 45%. At the same time, Adjusted EBITDA per scanner improves dramatically, illustrating a clear path towards profitable commercial scale. We are also investing in the operational foundation needed to support growth.
Our new 22,000 sq ft headquarters and manufacturing facility in Petaluma, California, provides us more than 2.5 x our current operational space while reducing our lease cost per square foot by approximately 55%. This expands capacity and efficiency at a comparable overall real estate cost.
In July, we completed our first routine FDA inspection with zero Form FDA 483 observations. We believe that outcome reflects the strength of our quality management system and the quality culture supporting commercialization. Creating a new category also requires awareness.
Through our engagement with The Shift and participation in forums at Harvard University and during Wimbledon week, we're helping elevate the conversation around breast density, patient choice, and patient-centered imaging. We intend to keep these awareness initiatives closely connected to our clinical, reimbursement, and commercial objectives.
In summary, we are executing on our early commercial scale with multiple near-term value inflection points. First, we have an FDA-cleared and commercially validated technology addressing clear limitations in breast imaging. Second, our commercial infrastructure is in place through partnerships for manufacturing, distribution, and international expansion.
Third, we have established our direct sales force based on strategic sales industry leaders. Fourth, commercial adoption is scaling, with revenue growing from $4.9 million in 2024 to a 2026 forecast of approximately $39 million. Fifth, reimbursement and global regulatory expansion is underway. Sixth, our platform creates upside beyond hardware through cloud software, AI diagnostics, and quantitative biomarkers.
In addition, we've strengthened our balance sheet and are allocating capital towards the milestones that can create durable value. Our priorities for the remainder of 2026 and into 2027 are clear. Accelerate adoption and installed base growth, strengthen the clinical and scientific evidence, expand global market access, advance the quantitative imaging platform, and scale with operational discipline.
We recognize that establishing a new category in breast imaging takes time and rigorous execution b ut today, QT Imaging is a stronger company with commercial momentum, a growing clinical foundation, and multiple potential value inflection points ahead. Thank you for your time and interest in QT Imaging. I'd be happy to answer your questions.
The first question is regarding our revenue stream. How much of the revenue in 2026 is hardware versus software recurring? As we scale, how do we expect that mix to change? As mentioned in the presentation, we're still working on the AI platform. We're expecting that to come out beginning of next year.
Currently, the revenue we're generating in 2026 is primarily hardware-based, so scanners and consumables b ut as we release the AI platform, we anticipate the shift to more of the recurring revenue, and less on the hardware and consumable revenue.
How do you expect gross margins to trend as your commercial model transitions to a hybrid model? Currently we're primarily selling to a distributor in the U.S. They obviously mark up the scanners when they sell them to their customers. By selling directly rather than through the distributor, we can bring in that profit, which would be a considerable bump up from the, basically 41% gross margin on the hardware that we're realizing in the U.S. currently.
So, your higher price point will bump up the margin. In addition, as we start selling the AI platform beginning of next year, then obviously that will further increase the gross margin. So we're expecting a pretty sizable increase in our margin next year, with the direct model and with the AI SaaS platform.
My question is, how important will the Category III CPT code be to broader clinical adoption beginning in 2027? It will be very significant. Currently, there is some reimbursement under more of a generic code at about $200 a scan. Out of pocket, imaging centers are charging $500- $550 per scan.
This Category III code will allow us to start collecting data that will allow us to move toward the Category I CPT code to hopefully set the price point for reimbursement and working with payers to have them accept the code and provide reimbursement. They still could be out of pocket, but I think moving towards reimbursement of the scans would be a significant step forward.
How are we balancing continued commercial investment with the current debt load and future capital needs? As mentioned, we raised $10 million earlier this year. We raised $18 million last year.
We had $10 million of long-term debt that was coming due beginning of next year that we have pushed out two more years to 2029. We are progressing with the increase in scanner shipments and revenue. We are progressing towards profitability. We are not actively pursuing additional capital, although we are always mindful of that. I think as opportunities arise, we will consider them.
How much visibility do distributor minimum order commitments provide into future revenue? The NXC Imaging minimum order quantities extend through this year. We do have minimum order quantities with Al Naghi Medical and Gulf Medical that go another couple of years. As I was saying in the presentation, our shift is more to direct sales. We still want to leverage distributors but more so internationally, and really focus on increasing our direct sales. Obviously, we can maximize our margin.
What needs to happen to improve utilization of scanners already installed in the field? I think some of that is through the clinical studies that we have underway demonstrating the QTscan versus existing modalities, being mammography, MRI, handheld ultrasound. I think as we continue to do those studies, release information, I think that will help.
Obviously, I think with the work we are doing with The Shift, I think getting more information out there generally, where women understand that there is additional options for supplemental imaging compared to just mammography and MRI. Realizing also that the experience, it is no ionizing radiation, no compression, no contrast, that it is just a much better overall patient experience. I think all those I think will continue to lead towards higher utilization of the scanners that are already installed in the field.
With that, I will wrap up the presentation. Thank you for your interest in QT Imaging. Thank you, operator. You can now close the call.
Thank you. That concludes QT Imaging Holdings, Inc.'s presentation. You may now disconnect. Please consult the conference agenda for the next presenting company.