Good afternoon. Thank you for joining us for Stereotaxis' third quarter 2026 earnings conference call. Certain statements during the conference call and question-and-answer period to follow may relate to future events, expectations, and as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the company in the future to be materially different from the statements that the company's executives may make today. These risks are described in detail in our public filings with the Securities and Exchange Commission, including our latest periodic report on Form 10-K or 10-Q. We assume no duty to update these statements.
At this time, all participants have been placed on a listen-only mode. The floor will be open for questions and comments following the presentation. As a reminder, today's call is being recorded. It is now my pleasure to turn the floor over to your host, David Fischel, Chairman and CEO of Stereotaxis.
Thank you, operator, and good afternoon, everyone. On our last few calls, I provided significant background on our innovation and commercial strategy. I want to keep today's prepared remarks more focused on our near-term priorities, key updates from the past quarter, and expected upcoming milestones. It's a busy and exciting period. Our near-term priority is to drive forward two major business model transformations. The first is shifting from capital systems that require long sales and construction timelines, having a portfolio of systems that can be easily installed and are therefore significantly more accessible and scalable. The second is developing and commercializing a portfolio of disposable interventional catheters that enhance the value of our robots and provide us with a robust recurring revenue opportunity.
We are fully focused on pushing these two major structural transformations forward such that they are established realities and a solid foundation upon which to build a healthy, high-growth, profitable company. On the capital side, the two primary innovations that are beginning to have a commercial impact and advance this structural transformation are GenesisX and Synchrony. GenesisX is our newest robotic system for minimally invasive endovascular procedures. It can be installed in existing operating rooms without the need for construction or the purchase of a specific integrated X-ray. Synchrony is our consolidated digital cockpit for the operating room, enhancing procedural workflow and introducing intraoperative connectivity and augmented intelligence. Our revenue growth in the third quarter benefited from the initial commercial impact of these two technologies. System revenue of $3 million in the quarter was up 60% compared to the third quarter of last year.
We benefited from partial revenue recognition from the first GenesisX system sale in the U.S., the first Genesis system sold in China, and multiple Synchrony systems sold and installed in the U.S. Installing the first GenesisX systems and demonstrating their performance and reliability in the real-world setting will be significant milestones. We are prepared to install the first GenesisX system in the U.S. this month and expect to install the first GenesisX system in Europe soon afterwards. A clear requirement for the broad adoption of GenesisX by hospital customers is ensuring it can be used interoperably with various standard X-rays. We had two significant recent milestones supporting this broad interoperability. in August, we received FDA clearance for an upgraded version of GenesisX, approved to work in a compatible fashion with any non-modified, non-integrated X-ray.
Our systems have never had this capability or broad regulatory label, with all our previous robots being tied to a specific X-ray modified to work with us. At the end of October, we were delighted to enter into collaboration with Canon, a global leader in X-ray technology. Our collaboration supports compatibility of GenesisX with their X-ray, along with co-marketing of our systems together and opportunities for other technology and commercial collaborations. The first U.S. GenesisX system will be installed alongside Canon's X-ray, and we are looking forward to this first commercial installation together. Beyond the already announced first U.S. and European GenesisX systems, we have visibility to an additional GenesisX installation early in 2027 that will work in a compatible fashion with an X-ray system from another major manufacturer.
We have a pipeline of a couple dozen GenesisX opportunities and expect commercial activity to increase meaningfully as the first systems demonstrate their performance in real-world use. The second key capital system in our portfolio is the Synchrony digital operating room system. This past quarter was the first full quarter of commercialization following FDA approval in spring. We had multiple Synch rony systems ordered, sold, and installed in the quarter, alongside robots, but predominantly as standalone systems installed in non-robotic cath labs. We were particularly excited by the first multi-lab installation of Synchrony with Abbott Northwestern Hospital in Minneapolis, becoming the first hospital in the world to adopt the Synchrony system as a standardized technology across its four cardiology catheterization labs. We have a robust pipeline of Synchrony systems, with a few dozen identified as actionable within the next year.
GenesisX and Synchrony are independent, though synergistic opportunities to grow capital revenue significantly. We are just in the earliest stages of commercializing these systems, but are excited by the recent accomplishments and near-term milestones, and expect more consistent and substantial capital activity in the coming months. The development and commercialization of a portfolio of robotically steered interventional catheters is the other major transformation we are driving forward. We will have several million dollars in robotic catheter revenue this year, up from just a few hundred thousand dollars last year. This is despite significant supply constraints and the challenge of our customers needing to transition relatively abruptly from the historic J&J ecosystem they've been dependent on. Robotic catheter revenue in the third quarter was up over 20% sequentially from the second quarter and up over 400% from a year ago, but underperformed our expectation.
Osypka, our contract manufacturer in Germany, has not been able to meet its forecast for production of MAGiC catheters. We saw no increase in MAGiC shipments in the third quarter versus the second quarter. In Europe, we are fortunate to have two other robotic magnetic catheters that we can offer to customers through exclusive distribution rights we established with industry partners. We have pivoted to fully focusing on these catheters in Europe, and by doing so, will better serve our European customers and will preserve limited MAGiC production from Osypka for the U.S. In the U.S., MAGiC remains the only available catheter for customers, and we have worked hard alongside our customers to manage the painful reality of limited supply. We entered the fourth quarter with a backlog of approximately $1.9 million in disposable orders we could not convert to revenue due to supply constraints.
While continuing to work with Osypka to improve their processes, we are also fully aware of the need to establish additional supply capacity. We reached significant regulatory milestones in that effort in recent months and see the opportunity for the shortage to be resolved in the earlier parts of 2027. Even with no improvement in shipments from Osypka, we are confident in achieving a high watermark of recurring revenue this quarter, primarily driven by the shift to our alternative catheters in Europe. It is important to keep in mind the context for our annual growth in disposable revenue.
It reflects significant contribution from an improved razor blade business model, counteracting significant procedural pressure from limited catheter supply, and the challenging transition away from J&J. As we continue to address these headwinds and constraints, we expect the power of the attractive recurring revenue business model to become much more visible and impactful.
While these two structural transformations in capital systems and disposable revenue are our clear near-term focus, we continue to advance a broad innovation pipeline that will enhance our clinical impact and commercial opportunity. This progress is often underappreciated, but is a source of significant excitement internally and among our physician customers and industry partners. Several of the most impactful innovation efforts internally include a future generation of GenesisX that will be fully wireless, battery-operated, and mobile, a more robust portfolio of electrophysiology catheters, including robotic pulsed field ablation, a pipeline of robotically steered wires and catheters for the cardiology and neurointerventional fields, and AI efforts that will incorporate intelligent decision support features into Synchrony and automation to our robotic platforms. In addition to these internal efforts, the most notable contribution to our innovation pipeline came with the closing of the Robocath acquisition last quarter.
We have been busy working alongside our new Robocath teammates to develop their next-generation robot. The R-Star system is a mechanical robot with essentially human-like fingers that can hold and manipulate five catheters and interventional devices in tandem. It is being designed to work as an independent robotic system for the interventional cardiology and neurointerventional fields, but will also work synergistically with Stereotaxis's robotic technologies. Clinical data from a first-in-human study performed with the R-Star system was presented a week ago at the TCT conference. It showed superb clinical results and safety across a full range of complex coronary angioplasty procedures.
Our near-term work with Robocath is focused on four specific efforts: addressing remaining engineering work needed to reach formal design freeze, establishing a reliable supply chain, defining more clearly a continuous innovation pipeline for R-Star following initial launch, and enhancing R-Star with Stereotaxis's existing advanced software architecture, Synchrony digital cockpit, and SynX telesurgery system. All these innovations I just shared are relatively advanced. Some will have an initial commercial impact in 2027, and all of them are in a mature enough stage where they should have a commercial impact within the next two years. Our ability to advance so many complex technologies in parallel is a testament to the strength of our team. It highlights our global leadership in the technological race to make endovascular robotics an impactful reality in the large unaddressed markets of electrophysiology, interventional cardiology, and neurointerventions.
Before handing the call to Kim to discuss our financial results, I want to step back for a moment and make one general comment. I know that it may not feel like it from the vantage view of the capital markets, but this is a highly exciting period for Stereotaxis. In my nearly 10 years here, I have never felt as proud of what we have accomplished and as confident about the opportunity ahead of us. There are obviously stresses and challenges that weigh on us, but these are being addressed in a diligent fashion. It has been a long journey with some bumps on the path, but what we have brought together is remarkable. The core technology ecosystem we developed and our in-house capabilities to expand on those technologies are a very solid foundation.
Our vision for what Stereotaxis can accomplish is becoming increasingly clear and tangible. We are enthusiastically advancing forward. Kim will now provide commentary on our financial results, and then I'll make a few financial comments as well before opening the call to Q&A. Kim?
Thank you, David, and good afternoon, everyone. Revenue for the third quarter of 2026 totaled $8.9 million, a 20% increase compared to $7.5 million in the prior year third quarter, and a 16% increase sequentially compared to $7.7 million in the second quarter of 2026. System revenue for the third quarter was $3 million compared to $1.9 million in the prior year third quarter. System revenue in the current quarter benefited from partial revenue recognition on the shipments of the first GenesisX system sold in the United States, the first Genesis system sold in China, and the first full quarter of Synchrony system sales. Recurring revenue for the third quarter was $5.9 million, an increase of 6% compared to the prior year third quarter, and a decline of 4% sequentially.
Recurring revenue in the quarter benefited from a significant increase in revenue from our new portfolio of robotically navigated catheters, countered by general pressure on procedures due to supply shortages of the MAGiC catheter and the transition away from Johnson & Johnson. Gross margin for the third quarter of 2026 was 45% of revenue. System and recurring revenue gross margin were 15% and 59%. Gross margins for both system and recurring revenue are impacted by overhead allocation over low manufacturing volume. While we expect margins to remain at these approximate levels over the near term, we see significant opportunity for margin expansion in 2027 and 2028. Operating expenses in the quarter of $10.4 million included $1.3 million in non-cash charges for stock compensation expense, mark-to-market adjustment for acquisition-related contingent earnout consideration, and amortization of acquired intangible assets.
Excluding these non-cash charges, adjusted operating expenses were $9.1 million, an increase from $6.6 million in the prior year third quarter due to one-time transaction costs and higher expenses following the acquisition of Robocath. We believe it is reasonable to model future adjusted operating expenses, excluding non-cash and one-time items, at approximately $8 million per quarter. Operating loss and net loss in the third quarter of 2026 were both $6.5 million, consistent with the prior year. Adjusted operating loss and adjusted net loss for the quarter, excluding non-cash charges, were $5.1 million and $5.2 million, compared with $2.5 million and $2.4 million in the previous year, with the increase predominantly driven by one-time transaction costs and higher expenses following the acquisition of Robocath.
Negative cash flow for the third quarter was $6.5 million, of which $2.6 million was associated with the Stereotaxis core business and $3.9 million were payments associated with the acquisition of Robocath. At September 30th, Stereotaxis had cash and cash equivalents of $4 million. Concurrent with today's financial results, we announced the convertible note financing with $12 million funded upfront and an optional additional $12 million available at Stereotaxis' discretion following certain regulatory milestones. On a pro forma basis, taking into consideration the proceeds of this financing, Stereotaxis would have $16 million in cash and cash equivalents. I will now hand the call back to David.
Thank you, Kim. As Kim just mentioned, concurrent with our quarterly results, we announced the closing of a financing for up to $24 million. We appreciate the strong support we received from our long-term investors. The structure of the financing as a convertible note with an initial $12 million upfront investment and then an additional $12 million optional draw. This structure reflects our belief that the financing bridges us to profitability within the next year. The conversion price of the note is at a 30% premium to our recent stock price, and interest is due at maturity in three years. The incremental $12 million optional draw is contingent on a regulatory milestone we expect in the coming months that addresses the supply constraint we have experienced with MAGiC.
Upon achievement of the milestone, we would have the option, but not the obligation, to draw the additional $12 million in funding. With this financing, we have $16 million in pro forma cash on our balance sheet and access to an additional $12 million for total availability of $28 million. We had significant non-recurring expenses in the third quarter related to the closing of the Robocath acquisition. The ongoing costs will be more modest, even as we aggressively advance development of the next-generation R-One system. Having Robocath under our belt for the past four months, I am delighted that we made the acquisition. It is an attractive and differentiated technology, with Stereotaxis adding significant value through our expertise and synergistic capabilities, and I am confident we will turn the technology into a highly impactful and valuable asset.
We expect growing recurring revenue and more consistent capital sales in the coming quarters. Two near-term milestones that support this include installing the first commercial GenesisX system and resolving the supply constraints with MAGiC. We expect the coming months to be an event-rich period. With the expected growth in recurring revenue and a more reliable tempo of capital sales, we see a clear pathway to profitability next year. We will now take your questions. Operator, can you please open the line to Q&A?
We will now begin the question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. We will just take a brief moment to compile the Q&A roster. Your first question comes from the line of Josh Jennings from TD Cowen. Your line is live.
Hi, good afternoon. Thanks for taking the questions. I wanted to, David, just how are you doing? Touch base on just your sense of the EP community's reception to robotics and how that has been evolving over the last 12 months. I mean, just my own personal view and experience has been just thinking about the robotics symposium at HRS, some of the panels at HRX Live, and then you just had SCRN within the last couple weeks. It seems as if the interest level is percolating, but I wanted to get your view and your experience and whether mine is the right interpretation.
Yeah, sure. Happy to answer that. Thanks for the question. I think both those two conferences that you mentioned, both the robotics symposium at HRS in the springtime, and then just a month ago, we had the SCRN, Society for Cardiac Robotic Navigation Conference in Europe. Both of those were very well attended, far better attended than ever in the past, and we had an enthusiastic physician base attending it. So those were both very uplifting events. I would say that there is generally, among our existing user base, all of them are going through the process of switching from an ecosystem that they were long used to the new ecosystem with our own catheters and with different mapping systems, shifting away from Johnson & Johnson. That is, for some, that is a great process. For some, that is smooth. For some, those are more challenging.
But we have been working with each site by site to get through whatever administrative hurdles, work in that process, and to make sure they are comfortable with the new technology setup. I feel that we are overall working through that process in a diligent, thoughtful fashion. I feel it is always tough to change things in healthcare, to change things that have been working for them for many years, but I think overall, we are working through that in a good fashion. The shortage of catheters in the U.S. does create additional layer of stress for those sites. We are fortunate that those sites understand our situation, understand the difficulty, and overall, we are able to work with them despite that challenge.
I think if you look at the overall space beyond our existing users, you have many physicians that are starting to look at us again, given the new technologies that we received approval for over the recent months, and are intrigued by our innovations, are engaging with us more. We definitely have a pipeline that is more exciting than it has ever been in the past. There is an aspect of proving that that pipeline works, making sure we can supply that pipeline, and then capitalizing it through actual orders and new installations. If you have been following us, our press releases and social media, we obviously had two new installations, new launches of robotic labs in Europe over the last quarter, both of them in greenfield sites. Both of those launches have gone very well so far.
We see a pipeline with GenesisX that we believe we will be able to capitalize much more meaningfully as we demonstrate GenesisX working in the real world and as we demonstrate compatibility with multiple different X-ray systems in these next few months. Overall, it feels relatively good. I would say the one big macro pressure to some extent on the space, and you see it with others in the electrophysiology field, if you look at, let us say, companies, let us say, in the surgical ablation space or some others, is the rise of PFA has definitely served as a style of distraction for many physicians. We have made significant progress, even just in most recent weeks, on pairing PFA with our robotic system, particularly first in Europe, but whatever we do in Europe will come ultimately to the U.S.
That definitely has served as a style of distraction in the field, where even in procedures where PFA isn't so relevant and in areas where the robot isn't being pressured by PFA from a competitive perspective, just from a mindshare perspective, there's obviously been the four big players in this field have very big microphones, and they have created a lot of other distractions in the field over this time. I think that that kind of will play itself out, and I don't see that as a direct competitive threat to robotics at all, but still, that is something that is distracting.
I appreciate that answer. Just to follow up, I know we've touched on this in some recent discussions, but just thinking about the opportunity in pediatric electrophysiology, it's seen where PFA is not penetrating, but maybe you could just touch on how Stereotaxis is positioned there and whether demand is increasing, and then how you see that opportunity evolving, and maybe size it up. I just have one last follow-up.
Sure. I think maybe if I step back a little bit with some context, right? The cardiac ablation market is now a $16 billion plus annual medical device market, if you look just at the commentary and the results of the four big players that dominate that field. That's obviously highly attractive. It's probably, if not the most, one of the very most attractive medical device markets that exists right now. Obviously, as still a small player, we leverage our differentiation and where our differentiated technology provides the most clinical value for patients and physicians and hospitals, and that's typically in the more complex procedures.
If you look at MAGiC, it's actually one of the things that is most unique and exciting about the catheter, is it's the only catheter, ablation catheter, that has ever been approved for patients with congenital heart disease by FDA. That's obviously a very unique label, and it kind of leans upon our strength in being able to treat some of these very complex anatomies where traditional catheters can't be used or can't be used successfully. That's kind of clearly an area of differentiated focus. We have seen the vast majority of use of robotics over the last years has been in things like congenital heart disease, pediatric patients, complex ventricular tachycardias, premature ventricular contractions, these types of kind of complex procedures where we provide the most value. We also see that some physicians decide to use the robot across the full breadth of procedures.
We have sites that use it also in simpler arrhythmias and across the full breadth of arrhythmia types. When I look at something like pediatrics, I think that that is, it's a niche of the EP market. It's probably about 1% or so of that 1.6%, of that $16 billion market. But it is a definitely underserved niche. Pediatrics is an underserved niche, congenital heart disease is an underserved niche. VT and PVCs are probably about 10% of the market, but they're definitely a challenging part of the EP field where we are really a particularly beneficial tool. I think as you look at some of those niches, that's where you'll see we continue to focus most of our innovation effort.
As we build good beachheads and demonstrate our ability to take 1%, 2%, 3% of the market, and obviously just doing that would give us a revenue opportunity in the several hundreds of millions, if not billion-dollar revenue opportunity. So, order of magnitude from where we are today. As we start to demonstrate our technology much more at scale in those niches, I think that you'll see that our robot will naturally be used and will have more and more opportunities also in simpler procedures down the complexity curve. That's kind of our overall strategy as we look at the EP market.
Excellent. Then just lastly, congratulations on the collaboration partnership with Canon Medical for Alphenix imaging platform and integration with GenesisX. We were able to see a little bit of it at TCT, but wanted to just see what the initial reaction has been and maybe talk about some of the synergies and potential cross-selling opportunities, and how this partnership can help as you move forward into this GenesisX commercial launch phase in 2027 and beyond. Thanks a lot.
Sure. So, I talked about the key structural transformations to our business model that are playing out and that we're driving forward right now. Obviously, one of the major ones is that historically, whenever a hospital physician wanted to adopt our robot, we needed to install it with a modified special X-ray. Transitioning from that style of capital sales, which is to something that can be installed with existing X-rays that are not modified in existing cath labs that don't require construction, that is a major change to our business model, and it opens up the opportunity for obviously much, much easier adoption, much, much higher scale of adoption. We've been advancing compatibility, whether it's unilateral or bilateral compatibility between GenesisX with the primary X-rays out there in the field.
We were delighted that with Canon, we are able to make this announcement, which is obviously an effort to have compatibility from both sides and to promote the system from both sides. Canon has an X-ray that is actually, they are the fourth-largest player globally, but has an X-ray that is actually particularly adopted in things like pediatrics, going to your previous question. We are delighted with the collaboration. We think that kind of the public aspect and the dual aspect of it does make it easier for hospitals, makes it more comfortable for hospitals to adopt our technology together.
There are definitely ways both by allowing the co-marketing and through technology things, those ways to make the joint solution even that more attractive over time. We are delighted to be starting this effort with them and think there is more to come in our collaboration, both with Canon and in demonstrating compatibility also with other X-ray systems.
Great. Thanks again.
Thank you.
Your next question comes from the line of Daniel Stauder from Citizens Bank. Your line is live.
Yeah, great. Thanks for the questions. My first one on the catheter supply ramp. I appreciate the update here. I guess with Osypka not meeting their supply expectations, where are they today in terms of per month catheters? Is that improvement that you expect in early 2027, you said 500 catheters per month watermark? I just want to make sure I'm understanding that correctly. What exactly is going into your efforts in resolving this shortage in that timeframe being early 2027? Thank you.
Yep. Thanks for the question. That is obviously a key question that is the center point of everything related to the second big business model change in terms of driving the recurring revenue opportunity. It has been highly disappointing that our contract manufacturer has not been able to ramp as expected. They have grossly underperformed their own expectations for the year in the ramp, and we have essentially seen, we saw some ramp up early in the year, and then have essentially, there were little green shoots of potential improvement where we thought that there was improvement, and then they had supply challenges again. This is primarily in how they increase their yields per production and in being able to hire talented enough staff that have good yield in the production process.
For whatever reason, despite this being their business to manufacture catheters, they have had particular difficulty with the MAGiC catheter and have not been able to ramp as expected. We have essentially seen since at some point in the second quarter and the third quarter had the same overall volume, which is still far below what would be needed to manage the procedural demand both in Europe and the U.S. It is also lower, even with now shifting in Europe to alternative catheters, it is lower than what is needed just for the U.S. And we have talked previously about wanting to reach 500 catheters per month in production, and that that would be supplying all of the procedural needs for the robot, given our installed base globally.
In the prepared remarks, I talked about how while we still work with Osypka to try to improve their processes and to help them increase their yields, we also recognize that that dependency carries with its risks, and it would be valuable to have redundancy in the supply chain. We are fortunate to have in-house capabilities that are very good and that have proven themselves very well over the last couple years. I want to still talk about things somewhat vaguely. I think that's the prudent thing for our business overall and for our relationships with other parties.
We've had regulatory milestones in that effort to set up redundant catheter supply. I believe that with certain regulatory decisions that we believe would be reasonable to achieve in the earlier parts of next year, we would essentially have redundant supply that would fulfill the demand, especially all the demand from the U.S., and that ultimately could also serve as demand for Europe. That is kind of the effort that has been underway. We've invested significantly in that effort over the last couple years, and we think that we're getting towards the late stages of that being a reality.
Great. I appreciate it. Just one follow-up. Just thinking about the backlog, I know you said there was $1.9 million that you couldn't confirm this third quarter, but I was curious if that's changed since then. How much have you been able to work through? How much of that is at risk as we think about your commentary on fourth quarter with recurring revenue for maybe achieving a high watermark? Just anything more you can give us on how that's developed since the end of 3Q. Thank you.
Sure. I'd say that some of that backlog is. Most of that backlog was dependent on MAGiC production. The shift in Europe to kind of really pivoting where as our sales team was working with each individual site to kind of have that site shift orders or not order any more MAGiC catheters and instead order the two alternative catheters that we have exclusive distribution rights to, that helped a lot. In Europe, essentially, that is resolving all of the supply difficulties. We made that decision during the summertime, essentially. We started kind of to pivot fully into making sure MAGiC catheters only come to the U.S. to resolve the supply difficulties in the U.S. and kind of shifting the commercial efforts in Europe to focusing on the two other catheters.
I think what you will see is that, probably with the backlog that we entered this quarter, probably about half of that, if not a little bit more than half of that, will be resolved in this quarter. We also will continue to receive catheters from Osypka that will resolve some of that backlog in the U.S., and we will get some orders that we are able to resolve intra-quarter normally with disposables do not have long lead times typically for us. We build up inventory of catheters that we are able to build up inventory with. So, that is where we have confidence given what we have done in Europe and given even just a baseline level of MAGiC shipments from Osypka, we have confidence in meaningful growth, again, sequentially in disposable catheter revenue and in overall recurring revenue in the fourth quarter versus the third quarter.
It still will be pressured. It is still without an increase in MAGiC production, we still will not be able to fulfill all of that backlog. There is just some of that, particularly in the U.S., where we remain limited. We are making investments in that alternative supply effort to ensure that once we have regulatory approval, we would essentially be able to supply all of the backlog within days of getting regulatory approval. So, that does require a real investment. We are comfortable making that investment, and so that is something that we have been very focused on to make sure that when the opportunity presents itself, we are ready to supply the customers in a full fashion.
Great. Thank you.
Thank you very much.
Your final question comes from the line of Frank Takkinen from Lake Street Capital Markets. Your line is live.
Hi, David. Hi, Kim. It's Wes on for Frank. Thanks for taking the question. Sounds like Synchrony placements have gone pretty well over the quarter. How should we think about Synchrony's contribution through the end of the year, and can you provide us any initial thoughts through 2027?
Sure. Thanks for the question. I'd say that we had roughly a handful, more than a handful of systems so far, and we previously were talking about $1 million a quarter, and I think in the near term, that's a reasonable expectation. I'd also say that we have a pipeline that is very nice to look at, and we have many, many individual hospitals and many hospitals that are looking at multiple systems, like what we discussed in the prepared remarks at Abbott Northwestern Hospital in Minnesota, which ordered four, actually ordered five, but had four installed already, standardizing their cath labs on us. We have other hospitals that are looking to do the same, and some have three, four systems, and some have seven systems.
There's definitely a pipeline, about 50 or so Synchrony systems that are in our pipeline just over the next few, less than the next year. That is exciting. We're still in the very early stages, right? This was just the first quarter of sales, first full quarter of sales, so we're really just working through how do we commercialize things, how do we deal through contracts. We've been becoming more efficient and effective in those processes.
Overall, I wouldn't be surprised if we start to see quarters where we have a couple million dollars of system sales in a quarter from Synchrony, and then as we anniversary these system installations, that's when the recurring revenue of service contracts and then software as a service subscriptions starts to kick in. Hopefully, kind of also at some point towards the end of next year, definitely in 2028, you will start to see also a more meaningful recurring revenue opportunities from these systems.
Awesome. That is very helpful. Thank you.
Thank you.
That concludes our question and answer session. I will now turn it back ove r to David Fischel for closing remarks.
Okay. Thank you very much for all the questions and for your continued support. We'll work hard to finish this year strong and wish you all a healthy and successful end to the year. Thank you.
This concludes today's meeting. You may now disconnect.