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DATE

Thursday, Aug. 6, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer and Chairman - Arun Swarup Menawat
• President - Mathieu Burtnyk
• Chief Commercial Officer - Tom Tamberrino
• Corporate Controller - Matthew Sobczyk
• Investor Relations - Stephen Kilmer

TAKEAWAYS

• Revenue -- $2.5 million, reflecting 12% growth year over year, though performance was impacted by a $3.1 million timing shift for shipments completed in July.
• Adjusted Revenue -- $5.6 million, representing 153% growth year over year when excluding the effect of shipment timing.
• Net Loss -- $9.5 million, or $0.26 per common share, representing a 39% improvement compared to the $15.7 million loss in the prior-year period.
• FY 2026 Guidance -- approximately $25 million, representing a 56% growth target compared to 2025 revenue.
• Gross Margin -- 78%, an increase from 73% in the prior-year period driven by a favorable product mix including capital system sales previously under operating leases.
• Operating Expenses -- $13 million, representing a 16% decrease year over year due to lower personnel costs and the completion of CAPTAIN trial enrollment.
• Cash Position -- $38.3 million as of June 30, 2026, compared to $59.7 million at the end of 2025.
• New Orders -- $7 million, a quarterly record for the company, with momentum continuing into July where a monthly order record was established.
• Sales Pipeline -- approximately $70 million, consisting of opportunities within verify, negotiate, and contracting stages.
• Pipeline Composition -- 70% in the United States and 30% international, with a split of 90% for TULSA-PRO and 10% for Sonalleve.
• TULSA-PRO Install Base -- 84 units at the end of the second quarter, representing a net increase of four systems compared to the first quarter.
• TULSA INDEX20 Growth -- 22% year over year for a fixed cohort of 20 active sites, despite a 12% sequential decline attributed to five sites facing temporary operational issues.
• Payer Coverage Expansion -- 18.3 million additional covered lives added during the second quarter, primarily through state Medicaid and managed Medicaid programs.
• Employer Health Plan Coverage -- 105,000 combined employees and family members added through the Johns Hopkins and Prime Healthcare health plans.
• OPPS 2027 Proposed Reimbursement -- $15.5 thousand per procedure, a 14.9% increase from the prior year, placing the TULSA procedure 44% higher than HIFU and Aquablation.
• Physician Payment Proposal -- $880 per procedure for TULSA, compared to $865 for HIFU and $1,060 for robotic radical prostatectomy.
• SRS 26 Lead Generation -- 160 qualified leads generated over four days, averaging four to five new commercial opportunities per hour.
• Penile Length Preservation Data -- 0.65-centimeter median reduction observed in robotic prostatectomy patients compared to no median change for patients treated with the TULSA procedure.
• Recurring Revenue -- $1.6 million, representing 64% of total reported quarterly revenue, derived from single-use devices and extended warranty services.
• Capital Equipment Sales -- $871,000, contributing to the reported top-line figures for the quarter ended June 30, 2026.
• H1 2026 Performance -- 39% growth in the TULSA INDEX20 for the first half of 2026 compared to the same period in 2025.
• Shipment Timing Impact -- $3.1 million in product shipments originally anticipated for June were shifted to July, affecting revenue recognition periods.
• Patient Access Expansion -- 8.5 million covered lives added in the first quarter of 2026, contributing to a total non-Medicare covered life count of approximately 30 million.

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RISKS

• Sobczyk noted that the company faced a "temporary logistics issue" that shifted $3.1 million of anticipated revenue into the third quarter.
• Tamberrino stated, "With respect to ASCs, the proposed rule would reduce TULSA to $6.87 thousand," although he noted the company currently has no active sites in that setting and plans to challenge the cost reporting.
• Tamberrino indicated that five specific sites did not meet growth expectations in the quarter, including one site that "paused treatments during the transition" from a placement to a capital model.

SUMMARY

Management reported that Profound Medical Corp. (PROF -3.75%) reached a commercial inflection point in the second quarter, underscored by record new orders and expanding clinical data from the CAPTAIN trial. The company is transitioning its TULSA technology from early adopters to the mainstream market by establishing it as a versatile regional ablation category capable of both whole-gland and focal treatments. Strategic growth is being supported by expanding payer coverage, including the first employer-owned health plans, and favorable proposed 2027 reimbursement rates that widen the premium over competing modalities. Management confirmed its full-year revenue guidance and emphasized a path toward profitable growth through increased operating leverage and a record $70 million sales pipeline.

• CEO Menawat stated, "The time for incisionless surgery has come," noting that Profound is a founding member of the new Society of Incisionless Surgery.
• The company expects FDA clearance for TULSA integration with the Siemens Free.Max magnetic resonance system by early 2027 to drive further growth.
• Management is exploring the integration of PSMA PET molecular imaging into treatment planning software to help physicians better define treatment margins.
• CEO Menawat noted that TULSA is currently compatible with an installed base of approximately 5,000 magnetic resonance systems in the United States.
• The company reported that 85% of prostate cancer is multifocal, supporting the clinical utility of TULSA's flexible ablation capabilities compared to strictly focal treatments.
• CEO Menawat highlighted the system's "supervised robotic autonomy," which distinguishes TULSA from master-slave robotic systems by executing tasks independently.
• The company launched a global patient advocacy group called "Let's Huddle" to promote awareness around men's health and the psychological impact of prostate cancer treatment.

INDUSTRY GLOSSARY

• APC Level 7: A Medicare billing category for hospital outpatient services that determines the facility fee paid for specific procedures.
• Aquablation: A robotic, heat-free waterjet treatment used for the removal of prostate tissue.
• ASC: Ambulatory Surgical Center, a facility where surgeries that do not require hospital admission are performed.
• HIFU: High-intensity focused ultrasound, a treatment that uses sound waves to ablate tissue.
• iMRI: Interventional Magnetic Resonance Imaging, where MRI guidance is used to assist in surgical or diagnostic procedures.
• OPPS: Hospital Outpatient Prospective Payment System, the system Medicare uses to pay for hospital outpatient services.
• PSMA PET: Prostate-Specific Membrane Antigen Positron Emission Tomography, an imaging technique used to locate prostate cancer cells.
• Sonalleve: A therapeutic platform for treating uterine fibroids and providing palliative pain relief for bone metastases.
• TULSA-PRO: A medical device that uses transurethral ultrasound and real-time MRI to ablate prostate tissue.

Full Conference Call Transcript

Operator: Good day, and thank you for standing by. Welcome to ProFound Medical's Second Quarter 26 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Stephen Kilmer, Investor Relations.

Stephen Kilmer: Thank you. Good afternoon, everyone. Let me start by pointing out that this conference call will include forward looking statements within the meaning of applicable securities laws in The United States and Canada. All forward looking statements are based on ProFound's current beliefs, assumptions and expectations, and relate to, among other things, any expressed or implied statements or guidance regarding current or future financial performance, and position and expectations regarding the efficacy of ProFound's technology. Such statements involve known and unknown risks and uncertainties. And other factors that may cause actual results, performance, or achievements to be materially different from those implied by such statements. No forward looking statement can be guaranteed.

Listeners are cautioned not to place undue reliance on these forward looking statements. Which speak only as of the date of this conference call. ProFound undertakes no obligation to publicly update or revise any forward looking statement whether as a result of new information, future events or otherwise, other than as required by law. Representing the company today are Arun Swarup Menawat, Co-Founder's Chief Executive Officer and Chairman Doctor. Mathieu Burtnyk, Profound's President and Tom Tamberrino, our Chief Commercial Officer. Also filling in for our CFO, Rashed due to a scheduling issue is our Corporate Controller, Matthew Sobczyk. With that said, I will now turn the call over to Arun.

Arun Swarup Menawat: Good afternoon, everyone. And welcome to the second quarter 26 Conference Call. On behalf of the management team, and everyone at ProFound, I would like to thank you for your ongoing interest in our company. For those of you who are shareholders, we appreciate your continued interest and support.

Matthew Sobczyk: I will turn the call over to Mathieu in a moment to provide clinical updates. However, before I do, I would like to provide a brief summary of our second quarter 26 financial results. All of the numbers I will refer to have been rounded. So they are approximate. For the 3 month period ended June 30, 2026, the company recorded revenue of $2.5 million with $1.6 million from recurring revenue and $871 thousand from capital equipment sales. Second quarter 26 revenue was up 12% from $2.2 million for the same 3 month period a year ago.

As noted in today's press release, this does not fully reflect our sales performance in Q2 2020. $3.1 million of TULSA product shipments originally anticipated in the final weeks of June were completed in July. Affecting the period of revenue recognition. Excluding the shipment timing, second quarter revenue would have been approximately $5.6 million representing a 153% year over year growth. Gross margin in Q2 2020 was 78% compared to 73% in Q2 2020. We continue to have confidence that the gross margin for our business will remain above our stated goals of over 70% over the long haul.

Total operating expenses in the second quarter of 2026 were $13 million down 16% from the $15.4 million in the second quarter of 2025. Overall, the company recorded a second quarter 2026 net loss of $9.5 million or $0.26 per common share compared to a net loss of approximately $15.7 million or $0.52 per common share in the 3 months ended June 30, 2025. As of June 30, 2026, ProFound had cash of $38.3 million.

As Tom and Arun will discuss later in the call, despite the revenue recognition timing issue in the second quarter, based on record order activity, ProFound continues to project total revenue for full-year 2026 to be approximately $25 million which represents 56% growth compared to its prior year revenue.

Mathieu Burtnyk: With that, I will now turn the call over to Mathieu Burtnyk, for an update on clinical and development activities. Thank you, and good afternoon. On past calls, I have highlighted the growing body of clinical evidence supporting the TULSA procedure as a new platform for prostate disease management. Capable of delivering whole gland treatment efficacy while preserving quality of life. The CAPTAIN trial has already proven that Tulsa delivered statistically superior quality of life outcomes compared to robotic radical prostatectomy. Achieving its primary safety endpoint. With statistically higher preservation of the composite endpoint of urinary incontinence and erectile function at 6 months.

In addition, patients treated with TULSA experienced superior perioperative outcomes including no blood loss, no overnight hospital stay, less pain, and faster recovery, along with statistically significantly fewer serious complications and a faster return to normal activities and paid employment. Most recently, at SRS, we presented positive incremental data from CAPTAIN demonstrating that whole gland Tulsa provided statistically superior penile length preservation compared to robotic prostatectomy. At 1 month following the Tulsa procedure, there was no median change in penile length after Tulsa compared with a median 0.65-centimeter reduction in penile length after robotic prostatectomy. To some people, and please pardon the pun, that might not sound like a super big deal.

But even modest amounts of penile shortening can contribute meaningfully to patient distress and reduce satisfaction following treatment. This new data points to the greater peace of mind that the TULSA procedure can deliver to patients by gently, safely, and precisely ablating prostate tissue while actively protecting surrounding structures such as the prostatic urethra. As we noted before, 1 of CAPTAIN's primary objectives is to support broader payer coverage. Randomized controlled trials remain the gold standard for coverage decisions, and CAPTAIN continues to generate evidence demonstrating meaningful quality of life advantages that resonate with both patients and payers.

In addition to ongoing CAPTAIN readouts and analyses, the clinical value of TULSA is continuing to become sharper as presentations focus more on what specifically make TULSA most versatile. Beyond demonstrating overall efficacy and quality of life benefits, ongoing clinical analyses are increasingly helping physicians understand where TULSA's capabilities may be particularly valuable. Examples include, patients with apical cancer, where the enhanced visualization of the MR allows urologists to precisely carve out tumor from the boundary of the sphincter muscle that controls continence. These patients almost always end up with urinary incontinence following robotic RP, but whose continence can almost always be saved if treated with Tulsa.

Secondly, patients with unilateral disease or cancer on 1 side of the prostate and whose nerves that maintain erectile function can be spared by not ablating the benign side of the prostate. Thirdly, patients where multiparametric MRI provides a clear hot zone that is suspicious of cancer within the prostate and thereby giving surgeons better guidance of what part of the prostate to kill. And patients with very large prostates, where Tulsa has demonstrated treatment flexibility without the increased side effect burden often associated with other modalities. I would like to conclude my remarks by reiterating that some gold standard treatment findings, detect durable 5-year outcomes, generating compelling Level 1 data, the clinical foundation supporting Tulsa continues to strengthen.

We believe this growing body of evidence increasingly positions Tulsa as a differentiated platform capable of delivering whole-gland efficacy, superior quality of life outcomes, and expanded reimbursement support.

Thomas Tamberrino: I will now turn the call over to Tom. Thank you. there is no question that momentum in our business is continuing to build. As Matthew Sobczyk mentioned, we recorded a year over year increase of 12% which would have been 153%, absent the $3.1 million shift in Q2 orders that were shipped in July and will be recognized in the current quarter. Speaking of temporary interruptions, you may have also noticed that while same store sequential quarter over quarter growth as measured by our new Index 20, declined by 12%, it grew 39% in the first half of 2026 over the same period in 2025. and 22% year-over-year.

The sequential change was mainly attributable to 5 sites not realizing the expected growth due to short term issues. For example, 1 of the sites converted from a placement to a capital model in Q2, and paused treatments during the transition. That site is now back online. Despite these onetime and or temporary issues, Q2 2026 marked another true commercial inflection point. And so far, we have seen that momentum continue into Q3.

We estimate that our qualified sales pipeline defined as being within 1 of the verify, negotiate and contracting stages, for TULSA PRO and Sonali is now $70 million While we cannot predict the extent and/or timing with which that qualified sales pipeline will translate into recognized revenue, it has been growing steadily, which certainly bodes well for the future. We had another monthly record for new orders in July, none of which included any of the shift or rollover from Q2. And SRS-26 was the most productive medical meeting I have ever been a part of.

To put that into perspective, our team's work generated more than 160 qualified leads over the 4 days of the event, So around 4 or 5 new commercial opportunities per hour. Again, it is not possible to predict what number of those will translate into actual sales. But also, again, boding well for the future. 3 additional tailwinds helping drive our commercial momentum acceleration are higher and expanding reimbursement. With respect to Medicare, a few weeks ago, CMS released the current-year 2027 Hospital Outpatient Prospective Payment System, or OPPS, and Ambulatory surgical center, or ASC, proposed rules. Under the OPPS proposal, Tulsa furthers its favorable reimbursement level relative to other treatment modalities.

To summarize those proposed changes, Talsa remains at urology APC Level 7, with OPPS payment increasing 14.9% to $15.5 thousand per procedure. That compares to an 11.6% increase for HIFU and Aquablation to $10.8 thousand and $12.3 thousand for Robotic RP. So, assuming the final rule does not change these numbers, starting in January 2027, hospitals would pay 44% or $4.7 thousand more per procedure for Tulsa than HIFU and Aquablation. and 26% or $3.19 thousand more for TULSA than robotic RP. Keeping in mind that hospitals can generally perform as many or more TULSA procedures versus those other modalities in a day, our premium there is clearly growing. Making our relative profitability for hospitals higher as well.

With respect to ASCs, the proposed rule would reduce TULSA to $6.87 thousand However, we do not currently have any active ASC sites, and we believe there may be an opportunity for us to correct the hospital cost reporting that appears to have driven the reduction. On the physician payment schedule side, Tulsa is more than holding its ground as well when viewed on an apples to apples basis. Adjusting for the fact that Tulsa is 0-day, while competitors are 90-day, physicians will be paid $880 for each TULSA procedure compared to $865 for HIFU, $1.06 thousand for robotic RP and $539 for Aquablation. Turning to other payers.

Coverage for the TULSA procedure expanded by approximately 18.3 million covered lives during the second quarter. Most of the newly covered lives came through state Medicaid and managed Medicaid, and similar programs. This follows the addition of 8.5 million covered lives in the first quarter, which included 6.9 million covered lives with Humana. And just today, we announced that the John Hopkins and the Prime Healthcare employee health plans together covering more than 105 thousand employees, medical staff and family members become the first ever employer owned health plan to list the TULSA procedure as a covered service. And we are just getting started. ProFound will continue to work collaboratively with payers, providers and health systems to expand coverage.

And streamline patient access pathways for the TULSA procedure. Looking ahead, I am confident in our ability to further accelerate. We are well positioned to capitalize on the expanding interest in image guided incisionless and autonomous robotic surgery. We are anticipating an extended reimbursement premium for Tulsa hospitals and physicians, We are growing an already formidable body of evidence demonstrating the superiority of our technology and we are continuing to scale our commercial footprint, both at home and abroad. Thank you for your time. I will turn the call over to Arun now.

Arun Swarup Menawat: Thanks, Tom and good afternoon, everyone. As I discussed in our Q1 call, the dynamics in the prostate disease treatment space continue to change at a rapid pace. Open, robotic prostatectomy or radiation therapy, are the standard of care. For treating prostate cancer today. And for BPH, mainstream treatment with transurethral resection of the prostate or TURP, has largely been unchanged over the past 100 years. It remains our belief that today's standards have plateaued. And that we can do better than the clinical outcomes from these standards.

Just a few days ago, at SRS 26, we saw firsthand that robotic surgeons are beginning to not only understand the potential of TULSA, clinically, but also recognize that TULSA is the only prostate treatment system that is MRI guided. TULSA is the only modality that offers the flexibility to treat the prostate gland regionally, meaning with whole-gland or near-gland, subtotal, or focal ablation. The time for incisionless surgery has come. The most tangible evidence of this is that the new Society of Incisionless Surgery or FIS, began its activities at FRS 26. And ProFound, HistoSonics and InsightSAC, are among the most prominent founding members of the new society. And TULSA is the only modality that deploys supervised robotic autonomy.

Meaning, it executes predetermined and or AI driven tasks independently. This compares to all competitive so called master slave robotic systems, that rely entirely on direct real time human hand movement and control. Today, TULSA's autonomous robotics enables persons to deliver consistent highly personalized treatment based on each patient's unique anatomy and disease. In the future, it may also give us an even stronger competitive advantage as incisionless surgery advances to its next frontier, including potentially tele-ablation. With respect to MRI guidance, I would like to directly address what many of our competitors have tried to use as a mark against TULSA.

While it is true, that as we first started commercialization, finding compatible MR available time, and convincing urology and radiology, to work together to adopt a program was a hurdle to climb. But today, TULSA is compatible with an installed base of about 5 thousand MRs in The United States, and more worldwide and that number continues to grow. It is therefore a lot easier to find an MR and justify TULSA particularly with the economic proposition as its facility fee is already higher. Than that of any other treatment modality and based on the proposal for 2027, the TULSA premium is only going to get higher.

Our relationship with MR companies also continues to expand as they see interventional MRs, as a growth opportunity for them, too. And as we have talked about on the past calls, MRs specifically designed for interventional procedures, are now becoming commercially available. These MRs are significantly smaller lighter, and easier to use to the point that even an MR tech is not necessary to operate them. They are also less costly to acquire and maintain and can be placed just about anywhere since they do not need the same shielding as larger magnets. The Siemens Free.Max series which is a prime example of such an MR.

Hook Medical has created an iMRI division, with the purpose of selling a turnkey interventional MR solution to hospitals That includes the smaller Siemens MR. The idea is that just as cath labs are robotic operating rooms, were created in the past The future is about creating interventional MR suites. We currently anticipate that if all goes well, TULSA will get FDA clearance for integration with the Siemens Free.Max by early next year, And we believe that we will meaningfully contribute to our growth in 2027. And we are not stopping with TULSA image guidance at MRI. In May, Illuccix Pharmaceuticals announced a collaboration with us as well as with a competitor that focuses on Focal therapy.

Illuccix, makes a PSMA PET imaging agent that bonds preferentially to prostate cancer and provides a clear view of the geographic location of cancer within the prostate. Our team is exploring the potential to integrate these types of PSMA images into the TULSA PRO treatment planning software. Approximately 85% of prostate cancer is multifocal. Meaning that there are 2 or more distinct index lesions and or satellite lesions present in different areas of the organ. The other 15% is unipocal. Meaning there is only 1 distinct index lesion.

It follows that whole gland and subtotal ablation is likely the most appropriate approach for the vast majority of prostate cancer that is multifocal, while focal ablation may be best for patients with unifocal disease. We are already seeing urologists use PSMA to complement MRI to better define treatment extent with appropriate margins extending to the prostate capsule. So for TULSA, this is not about patient selection. it is about empowering physicians to plan and deliver the best possible regional ablation from whole-gland to focal and everything in between. To summarize, profound is pioneering iMRI procedures, which enable precise incisionless therapies that improve clinical confidence, procedural control, and patient outcomes.

By leveraging real time MRI guidance, and autonomous robotics ProFound's technologies are designed to replace uncertainty with consistency and clarity across treatment planning, delivery and confirmation. In prostate cancer, we believe we are now crossing the chasm by transitioning TULSA from early-adopter customers to the mainstream market by establishing the technology as a third distinct regional ablation category that lets physicians or patients choose between whole-gland or focal treatments because TULSA can do both. And anything in between. The TULSA PRO install base was 84 at the end of Q2 2026. We estimate that the current aggregate total dollar value of our qualified sales pipeline, for TULSA PRO and Sonalleve is approximately $70 million.

We are reiterating our approximate $25 million total revenue outlook for full year 2026. Which represents 56% growth compared to 2025. And we also continue to expect full-year gross margin to be 70% or higher. Based on CMS proposed rule for 2027. The premium hospitals are reimbursed for TULSA over all competing technologies is expanding And at the same time, more and more lives are being covered by other payers including employer owned health plans. We continue to believe that we are on a path to profitable growth. This ends our prepared remarks for today. With that, we are happy to take any questions you might have. Operator.

Operator: At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone, and wait for your name to be announced. To withdraw your question, please press 11 again. Please stand by. First question comes from the line of Ben Haynor of Lake Street Capital Markets. Your line is now open.

Ben Haynor: Good afternoon, gentlemen. Thanks for taking the questions. First off, for me, just thinking about the $3.1 million that slipped from Q1 to Q or Q2 to Q3, Is that both capital and consumables? And then just generally speaking, how soon after quarter end did that did those units or product ship?

Arun Swarup Menawat: Good afternoon, Benjamin. Good question. So it was actually a consolidated shipment that went from Canada. And the only reason it was not recognized is because we did not get all of the you know, delivered receipts. Within the quarter time frame. So with some of them, you know, they were in July. So pretty much everything has been sent. And I think you know, it sort of begs the second question. it is like, okay. How do we make sure this kind of stuff does not happen again? And I think that I can certainly provide a little bit of color on that. In the sense that we have since that time increased our logistics and operating staff.

And we are actually in the final stages of bringing a very experienced vice president level operations person. And so this is you know, part of our growing And it was, you know, as I said, it was a consolidated shipment. We did not get all the receipts, so we did not recognize it. in Q3, but it is Most likely will be recognized in Q3.

Ben Haynor: $7 million of new orders Maybe you can share what the previous record was and then, you know, obviously, you have had I had a great conference here recently with the 160 new qualified opportunities. Do you have a sense based upon history, kind of how quickly some of those can shake out into actual orders?

Thomas Tamberrino: And that is a great question. And I appreciate you asking it. As mentioned in the prepared remarks, very difficult to give a definitive answer. But what I can tell you anecdotally is some of those leads have already materialized into deals that were not in our pipeline. That are already well down the funnel and into the negotiating and contract stage, which is extremely exciting. As is often said in the line of medical device sales, you know, deals can take a year to develop and a day to dissolve. Or they can take a day to develop and a year to complete. So it completely runs the gamut. So it really just time will tell, Benjamin.

Ben Haynor: Okay. Fair enough. And then on the penile, I guess, shortening that you get with the robot, is there is there a plan to publish that data and maybe is it possible to characterize the range of outcomes there? I mean, I would think a lot of guys would care about the worst case scenario rather than you know, an average or median.

Mathieu Burtnyk: Hey, Benjamin. Yeah. Thanks. This is Mathieu on the line. So to answer, you know, your question directly, the we are preparing that data as part of the broader picture of perioperative operative outcomes that we have released in the past. In Q1 and before that. And so to really package it together as a total sort of patient experience, On the surface, you know, a difference of a few millimeters may not sound like a major outcome. However, for many men undergoing treatment for prostate cancer, literally every millimeter matters.

The reason that penile shortening is not just a physical measurement, it can also serve as a constant reminder of both their cancer and the treatment that they underwent, which can affect their confidence their emotional well-being, their intimate relationships, and overall satisfaction with treatment. So we do view this result in the broader context of the CAPTAIN dataset. In and of itself, penile length preservation is not the reason a physician or a patient may choose a treatment. However, when you combine this resolve with the previously reported superiority in preserving erectile function, urinary incontinence, as well as the pure benefits of the no blood loss, no overnight stay, faster recovery, fewer major complications.

It really paints a compelling picture of the overall patient experience. And, really, together, these outcomes highlight the potential for Tulsa to deliver that effective cancer treatment while preserving quality of life. So, ultimately, we believe the future prostate cancer treatment will be driven not only by cancer control, but also by quality of life outcomes. And this penile length result is another example of how the Tulsa procedure's ability to precisely ablate the prostate tissue while protecting surrounding structures can translate into benefits that matter to patients.

And as more of these quality of life data emerge, we do believe that this will increase the influence of patient preference, physician recommendations, and overall demand for treatments that do preserve the quality of life. On the topic of sort of the range, I mean, certainly, was a range. This is a non conventional endpoint that we did include in the protocol. And, you know, so the way that the measurement made, the measurement has a medium change and a range around that.

Arun Swarup Menawat: Okay. Okay. Got it. Then, well, I have just a quick think just a quick anecdote. There was actually a publication at the SRS where you know, effectively, its conclusion was that every millimeter counts for patients.

Ben Haynor: Yeah. I mean, it makes sense. I believe there was an Italian study out there that showed some even greater impact for the robot. But I will leave it there, and, congrats on the progress. Thanks for taking the questions.

Arun Swarup Menawat: Thank you, Ben. Thanks a lot.

Operator: Our next question comes from the line of Michael Freeman of Raymond James. Your line is now open.

Michael Freeman: Hi, Arun. it is Matthew. Matthew. A few questions following up on Benjamin. So I am curious on the on the shipment timing challenge. Like, we also saw that there was a shipment timing statement that you guys made in the first quarter indicating that 6 TULSA systems were shipped but not installed by the first quarter. And noticed that the incremental increase in TULSA installs was 4. Quarter to quarter. Could you tell us just I guess, what logistically or operationally is happening on these on these shipments? Like, what challenges or delays maybe you are running into? And I know you mentioned that you had hired on some extra staff to manage this.

So I wonder if you could just shed some light. On this timing challenge.

Arun Swarup Menawat: Michael, I am happy to do it. So these are actually 2 different issues. The 1 related to rev rec in the second quarter is more about shipping to fulfill orders that we have received. And given that we did not get all the receipts either did not recognize but will recognize in Q3. so it is it is more of a logistics issue from the perspective of shipment and so on. And as I said, we are you know, we are pretty much fixing. Already. So that is sort of an issue on the past.

The other 1 that you are asking is actually once the product is shipped it you know, it is installed, the site gets trained They schedule patients and so on. So then when we look at the install base, we are looking at sites actually treating patients. And normally, there is a gap of a minimum of 60 days to a hundred and 20 days it is based upon the scheduling of the hospital, the training programs, and their ability to start educating their customer population, so on. So that is actually a separate issue.

It is more about, you know, how do they actually convert the TULSA system into a treatment program and you know, confirm all of their reimbursement and so on. So I hope that answers your question. From the perspective of the install base.

Michael Freeman: Gotcha. Yep. that is that is helpful. Now on the maybe a question for Tom. On the on the pipeline, you know, we have earlier, you were quantifying the pipeline in terms of number of Tulsa systems. Now we are talking about dollars in aggregate value and also and also splitting that between TULSA and Sonalleve. I wonder are you able to give a number of new TULSA systems? In your in your pipeline? And then and then, I guess, also, shed some light on what proportion of Sonalleve sales might make up that 70 million aggregate value.

Thomas Tamberrino: Michael, great questions, and thank you for asking them. I will tackle the last question first and then work my way to the beginning of your commentary. What I can tell you is that in terms of the $70 million that fall within the verify, negotiate, and contract categories of the sales funnel, it is roughly a 70%-30% split between The United States and international. In terms of dollars. Forecasted within those respective categories. And then as it relates to Tulsa Pro versus Sonalleve, it is roughly a 90% TULSA PRO, 10% Sonalleve split.

And the reason that we have moved away from providing what I would consider to be, you know, units versus dollars is we want to stay focused on maximizing top line revenue and gross margin and growing Tulsa programs and Sonalleve programs versus simply installing systems. And that is 1 of the major reasons we have obviously introduced the index 20 as well. Is that we want to get to the point as we have messaged before where we have 200 TULSA Pro systems installed and treating men across the world.

With an average of 50 men per year, and that would allow us to treat over 10 thousand men per year So I hope that answers the question that you had. And I am, of course, happy to answer any follow-up questions based on what I just responded with.

Michael Freeman: Yeah. Yeah. that is that is really helpful. Let's see. And then you did Arun shed some light on the decline in the utilization index. the utilization index. I wonder if you could just speak more about, about those sites. That ran into temporary issues and then also the trends you are seeing You mentioned there were good numbers in July. Yeah. Actually, Tom said was in his presentation, if you could just provide more color on that topic.

Thomas Tamberrino: Of course, Michael. Thank you for bringing it up. Obviously, there is there is a lot being presented within the index 20, and we are excited to share it. And I just wanna reiterate what I stated in the prepared remarks and then provide some more color on that. So while we did see the decline by 12%, in terms of sequential quarter over quarter growth, We did see an increase of 39% in the first 6 months of 2026 versus the first 6 months of 2025. And a 22% increase Q2 26 compared to Q2 25.

In terms of the main drivers of that, there were 5 sites in particular that did not grow as we expected them to do due to short term issues. To give some color to the example that was called out in the prepared remarks, in different countries and different industry independent distribution networks or health systems they have different policies.

For instance, if we are required to come in on a placement model, that placement model normally has a set period of time and a set number of metrics and milestones that need to be completed And after that point in time, they literally stop the program until they complete the process of determining whether they are going to acquire the technology. So in this instance, it is actually a high class problem. We were successful with the placement. The timeline associated with that agreement had come to close. And there was a gap of a certain period of time between when that placement ended and when the capital acquisition actually took place.

And with our modeling, it is beneficial to the hospital to go to the capital ownership model because that lowers the cost per procedure as it relates to the TULSA PRO kits. So all in all, it is a net positive. But clearly not impactful as it relates to speaking to quarter over quarter sequential growth.

Michael Freeman: Got you. All right. Thank you very much for this color. I will pass it on now.

Arun Swarup Menawat: Thank you, Michael.

Thomas Tamberrino: Thank you.

Operator: Our next question comes from Scott McAuley with Paradigm Capital. Your line is open.

Scott McAuley: Thanks. Afternoon, everyone. Thanks for taking the questions. Maybe just to circle back on some of Michael's questions. So the install base versus units sold, so correct me if I have this wrong, but so if you have 84 installed as of the end of Q2, there is 80 installed by the end of Q1. So that is net 4 new in the quarter. But if from the end of Q1, there were 6 units that had been sold but not installed, So does that mean there is still 2 more from that Q1 period that have not been kind of installed and up and running yet?

And then versus kind of net new sales in Q2 Like, I understand it You know? It be kind of confusing. So just looking for a little more color on some of those numbers.

Arun Swarup Menawat: Yeah. Scott, I think the way you have analyzed it, is exactly right. We shipped 6 systems in Q1 4 of them were installed in Q1. 2 of them are still in the process We have shipped about the same number in Q2 as I or you already heard the logistics thing. But you know, we are continuing to install more sites and so Q3, you will again see an increase in the install base. So that you have analyzed the numbers is exactly right. Got it.

Scott McAuley: And in terms of that pipeline of you know, getting the from the sale to the install, You know, I think that is 60 to a hundred days you would referenced the work on. that is I know it is a lot out of your hands, but trying to trying to accelerate that.

Arun Swarup Menawat: Yeah. And, you know, we are continuing to grow our teams in every key department. And I do think that over time, those numbers will continue to drop. But that has been-- it used to be higher than that. Used to be kind of 6 months. But now it is indeed less. And I also think that you know, as described the momentum that we are building in you know, at SRS. I think people are beginning to sort of see that, hey. This is the next thing. And that is automatically adding to a bit of a sense of urgency in multiple sites.

So I do think that over time, that number will shrink far closer to 60 days than it is today. And I think to your point, on number of sites and so on, and, you know, Tom described that we are moving more towards a pipeline that is described in dollars. But I do sort of think that it that 1 of the early indicators that we are gaining confidence in our pipeline is the fact that Q2 from a number of purchase orders point of view in dollars was actually the best quarter we have ever had.

So I think that, like, is a tangible data that sort of says that, hey, you know, this is this pipeline that we are not dollarizing is very real.

Scott McAuley: Absolutely. No. that is that is helpful. And maybe, again, on circling back on that pipeline question, and I and I understand wanting to present it in dollars versus necessarily units. Is there any way you can kind of quantify how that pipeline expanded or grown from that initial number of units versus dollar amount. Any other color there? No.

Arun Swarup Menawat: Yeah. You know, we I do not have an exact number for you. But you know, again, as you heard from Tom, at the SRS, We have 160 leads. Q1 also in terms of new leads was up I am sorry. Q2 was also very good quarter. So we are dollarizing. We are going to start qualifying and making sure that earlier pipeline that we just built is also added to this. But most certainly, this number is probably 30%-40% higher than what we have been have been looking at before. We you know, we sort of feel like if you go and say, how many sites versus a dollar amount.

We just think once you get beyond 100, it just becomes far less meaningful. A dollar number becomes more meaningful. that is the only reason for using the dollars.

Scott McAuley: Yep. Definitely. That makes sense. And maybe lastly, the, you know, on the team and the you know, operations side of things, I think it is mentioned in the press release that the operating costs actually went down relative. I may or may not have that right. But as you highlighted, you know, bringing on new operations people, potentially expanding the team to help get these installations in faster and obviously dealing with the expanded pipeline. Kind of any comments on how you see operating costs, you know, scale in the next few quarters?

And obviously kind of move in lockstep with revenue growth, but, kind of how you see that expense side of the income statement going in the next few months?

Arun Swarup Menawat: Great question, Scott. Know, there are several things about this. First of all, I do think that it does speak to the leverage ability of our product. Because, you know, good high dollar amount in revenue for the capital very good dollar amount per patient on the utilization part at a good high margin. So I do think that it is important to recognize that we are not just looking to be a growth company at any cost. We actually think that as the revenues come in that we are going to be heading more and more towards profitable growth. And I think that is a very important part of our strategy.

The second thing is that your point is exactly right. Is that we are adding resources as we go. We need to because obviously, we are very, very careful with the expenses. But we need to. And I think that they will all not always be in complete sync in, you know, more people added and higher revenue in every quarter. So I agree with you that you will probably see a little bit of an up and down in a quarter here and there.

But, again, I think as we see in the utilization side at this stage, if you begin to look at it as a, you know, half-year, first half year and new perspective, I think you will begin to see a trend. As the cost grow that the cost will grow you know, as close as possible to the growth of the revenue for us. So you know, again, just to be clear, you are exactly right. There will be some up and down. But I think on a bigger time interval, you will begin to see a trend. That will that will be on growth and the potential profitability.

Scott McAuley: that is great, Arun. I really appreciate the color, and that is all for me for now.

Arun Swarup Menawat: Beautiful. Thank you, Scott.

Operator: Thank you. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Our next question comes our next question comes from the line of Kyle Bauser of TI Partners. Your line is open.

Analyst: Great. Thank you for taking my question. Maybe on the sales guidance, are you assuming a certain amount of additional payer coverage policies this year And then, also, do you have a kind of a total number of covered lives to date? I know it was up 18.3 million in this last quarter and up 8.5 million in Q1. Just wondering if you have a kind of total running number.

Arun Swarup Menawat: Yes. Good afternoon, Kyle. To answer your first question, the answer is yes. We are continuing to work with insurance companies. On a routine basis, you know, almost every day. We see that patients who apply for reimbursement, even with insurance companies that do not have coverage policies and more and more are beginning to get reimbursed. So I think based upon that, we certainly expect that the number of covered lives will continue to increase.

Mathieu Burtnyk: Mathieu, I do not have the whole full number off hand. Do you have the full number?

Arun Swarup Menawat: Oh, the 18 plus what we reported in the first quarter. Are you asking me in the first quarter in terms of covered lives? Yeah. I think it was in the 8.5 million. So I think in whole numbers, I believe we are close to 30 million, maybe 29 million, or we are close to 30 million. Okay. Including Medicare, as well? But, no, that does not include Medicare. Yeah. Medicare is on top of that. Yeah. Yep. Got it. Okay. So just Medicare on top of the Q1 and Q2 numbers. That makes sense. Got it. Yeah. Great.

And then, you have talked about you know, extensively and during this call, how compelling the data out there is resonating with physicians. You know, particularly with the CAPTAIN result here. And, you know, showing Tulsa's clear benefit over robotic RP. You know, across ED, continents, and But I guess on the patient side, in your assessment, be curious to understand, you know, how involved the patients are when it comes to defining a treatment path. I mean, it just would seem like TULSA would be kind of a no-brainer here given the superior quality of life outcomes. So I am just you know, any color around this would be helpful. Yeah.

So let me just state a couple of things, and then, Tom, if you could please chime in also. So, you know, to your first point regarding the CAPTAIN trial and the conversations that we are beginning to have with you know, urology community I think the most interesting part to me has been the dialogue around the concept of trifecta. So what is trifecta? Trifecta is you know, cancer outcome, erectile dysfunction, and incontinence. And the reality is that in some ways, all 3 of these things are kind of connected. You know, if you remove more prostate, you probably have a little better clinical outcome, but you have higher likelihood of incontinence or erectile dysfunction.

And I think the most interesting conversation that we are beginning to have with the urology community in and we find them to be very receptive to this way of thinking about it. Is that I think that what we are beginning to see that if you evaluate it on a trifecta basis, you know, statistically the population that is in the trifecta of the robotic surgery versus the population that is in the TULSA arm, we think they are absolutely separate. And there is more flexibility. And I think talking to urologists in the language that they already use like this is 1 of the things that we find very, very satisfying.

I will turn it over to you from the you know, perspective of the patient.

Thomas Tamberrino: Thank you, Arun, and excellent question, Kyle. Thank you for asking it. I wanted to glean off of what we experienced in Society of Robotic Surgery, Arun and Matthew. Which was arguably the most successful medical conference I have attended, whether that was at LifeCell Corp., NOVADAQ Technologies, or here at ProFound. And we not only have the opportunity, of course, to meet with the 4 thousand-plus physicians from around the world who were in attendance, but as Arun mentioned, we got to meet with the founders of the Society of Incisionless Surgery, which we plan to be a big part of at their inaugural meeting in February 2025.

But there were also men that we spoke with who were courageous enough to confide that they were prostate cancer patients. Or survivors and to share with great vulnerability the struggles that they have been through related to complications they have experienced from the treatments they have endured. And I think we would be remiss not to mention the mental health impact that men who get diagnosed with prostate cancer are subjected to.

Not only with the diagnosis, but the stress and the anxiety and the unknown of what treatment to select because it is the first time they have gone through it and hopefully the last time So part of what we have done here at ProFound is we have launched a global patient advocacy group called Let's Huddle, and that is led by Leonard Wheeler, who is a prostate cancer survivor and a Tulsa Pro patient. And that group is not meant to promote TULSA PRO. it is meant to promote awareness around men's health, in particular, prostate health and mental health.

So on a monthly basis, Leonard hosts a group of men who can join from all over the world and provides open space for peer to peer conversation. And what I can tell you from having the privilege to participate in that on the last go-around in July, unfortunately, missed today's session. Which was here in August this afternoon eastern time. Was that we had men on who were authors of books, regarding facing prostate disease, men who have blogs with hundreds of thousands of followers, men who have consulting agencies that are literally built around educating other men how to take on their prostate disease journey.

So personally, I am most excited about raising the awareness around men's health both prostate health and mental health, because they go hand in hand. And what really took place at SRS, in my opinion, is that the conversation that is being done behind a consulting room door inside of an office is now happening on the podium in the audience amongst the men and women providing prostate disease treatment, And we are forcing the dialogue the same way that women force the dialogue around breast cancer diagnosis, treatment, reconstruction. Women were subjected to total mastectomies, radical mastectomies where they had their breasts removed.

They had their neck removed, and all they were left with was, you know, a flat chest wall. Well, now when women go through a breast reconstruction depending on the stage of the cancer, the results of their reconstruction rival that of an augmentation for cosmetic reasons.

And I truly believe all of us on the phone that are men and caregivers of men, we need to start the rallying cry, whether it is ProFound or the other folks that offer interventions for men's prostate disease, that men should be aware, they should have access they should be empowered to make the decision with their clinician based on their clinical presentation and what is important to them as it relates to quality of life. Sexual function, urinary incontinence, genial length, mental health. So I apologize for the emboldened response. But I truly believe we are an inflection point here in men's health care. And we have got to get louder. So thank you for asking the question.

Analyst: Yeah. Got it. No. Agree. And Very helpful. Thank you for that. And then maybe just 1 more question, if I may. We saw in the RP arm in the CAPTAIN trial that about 33 percent of patients had positive surgical margins. Any more Specific Timing Estimate For Later This Year Around When We will See the TULSA procedure histology and imaging for the, I think, 12-month biopsy and MRI results. to kind of quantify surgical margins.

Arun Swarup Menawat: We are still in the process of collecting all the final data, We are in the-- you know, we have a vast majority of the patient data in. But we are not all the way there yet. We are still very comfortable that sometime in Q4, we should be able to get you know, the whole information out. 12 month data. I would still like to point out that in the TULSA arm, you know, it is biopsy, which is the gold standard of how we are measuring. And it is very detailed, and it is, versus in the robotic arm, it is basically measuring positive margins. Which is very, you know, much simpler and far less comprehensive.

And most of the patients who underwent the robotic arm underwent what they call nerve-sparing prostatectomy. And so, you know, again, coming to that point about the trifecta, you know, we are seeing 35 percent positive margins. And you are seeing a little bit better than what you see in other studies on the erectile dysfunction. And so you know, we do think that we are in, you know, a pretty good position with respect to the particularly the trifecta, but to give you the answer, I think, most certainly, you are on track with Getting the information out in Q4. Got it. Okay. Great. Very helpful, and thank you for taking my questions. Thank you, Kyle. Thank you.

Operator: This concludes the question and answer session. I would now like to turn it back to Doctor Menawat for closing remarks.

Arun Swarup Menawat: Thank you so much, and thank you for all the analysts for their questions. Hopefully, we have answered them comprehensively for you. Look forward to similar dialogue in Q3. Thank you.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.