Breaking Down Profound Medical Corp. (PROF) Financial Health: Key Insights for Investors

You're looking at Profound Medical Corp. (PROF) and seeing a medical device company with significant growth, but you also know the biotech sector is a capital-intensive game, so the numbers need a hard look. The direct takeaway is that the growth story is accelerating, but the burn rate is still the primary risk. The firm just reported a record Q3 2025 revenue of approximately $5.3 million, representing an impressive 87% year-over-year surge, which is defintely a strong signal that their TULSA-PRO platform is gaining traction, especially with recurring revenue hitting $4.1 million. That's a great sign for future predictability. Plus, they're getting smarter about the business model, pushing Gross Margin up to 74.3%, a solid jump from last year, and they even narrowed the quarterly Net Loss to about $8.0 million, a 15% improvement. Here's the quick math: they are scaling, but they still had a Net Loss of $10.7 million and $15.7 million in Q1 and Q2, respectively, so cash matters; what this estimate hides is the total cash position, which stood at approximately $24.8 million as of September 30, 2025. You want to see how fast they can hit profitability before that cash cushion gets too thin, and with 70 TULSA-PRO systems now installed and a target of at least 75 by year-end, the path to scale is clear. We'll break down whether this momentum is sustainable and what specific actions you should consider next.

Revenue Analysis

You're looking for a clear signal in Profound Medical Corp. (PROF)'s numbers, and the third quarter of 2025 definitely delivered a strong one. The direct takeaway is that the company is successfully transitioning from an early-stage capital sales model to a more sustainable, procedure-driven revenue mix, evidenced by the record Q3 revenue of approximately $5.3 million. This figure is a huge jump, but the composition of that revenue is what matters most for long-term investors.

The core of Profound Medical Corp.'s business is the TULSA-PRO system, an incision-free therapeutic platform for prostate disease. This single product drives two distinct, but equally crucial, revenue streams. In Q3 2025, the breakdown shows a healthy and growing reliance on recurring revenue, which is what we like to see in a medical device company. That's a good sign of system utilization.

• Recurring Non-Capital Revenue: $4.1 million. This includes sales of TULSA-PRO consumables, capital equipment leases, and extended warranty services.
• Capital Equipment Revenue: $1.2 million. This comes from the one-time sale of the TULSA-PRO system itself.

Here's the quick math on that: recurring revenue made up about 77% of total Q3 revenue ($4.1M / $5.3M), which is a key indicator that the installed base is actually performing procedures, not just sitting in a hospital basement. This diversification is crucial because it smooths out the lumpiness that comes with capital equipment sales.

In terms of growth, the year-over-year comparison is striking. Total revenue for Q3 2025 surged by approximately 87% compared to the same period in 2024, when revenue was around $2.8 million. This dramatic increase recovered strongly from a challenging Q2 2025, which saw revenue of only $2.2 million due to what management called 'short-term delays' in capital sales. Management is now guiding for full-year 2025 revenue growth to land in the approximate range of 70% to 75% over the prior fiscal year, which is an aggressive but achievable target given the Q3 performance.

The segment growth is directly tied to the expansion of the TULSA-PRO installed base, which reached 70 systems by the end of Q3 2025, up from 60 in the previous quarter. The company expects to hit at least 75 installs by the end of 2025, which will further fuel that high-margin recurring revenue stream. The table below illustrates the recent quarterly revenue progression and its underlying components, showing exactly how the revenue mix is evolving.

What this estimate hides is the regional breakdown, as the US commercialization of TULSA-PRO remains the top priority, but new distribution deals in regions like Saudi Arabia, Australia, and New Zealand are starting to lay the groundwork for future geographic revenue diversification. For a deeper dive into the company's valuation and strategic outlook, you can continue reading the full post at Breaking Down Profound Medical Corp. (PROF) Financial Health: Key Insights for Investors.

Profitability Metrics

You're looking for a clear signal on when Profound Medical Corp. (PROF) will turn the corner from high-growth investment to profitable enterprise. The short answer is that while the company is not yet profitable, its operational efficiency is defintely trending sharply in the right direction, a critical factor for a commercial-stage medical device company.

The core story here is a massive expansion in gross profitability, but it's still masked by aggressive spending to capture market share. For the third quarter of 2025 (Q3 2025), Profound Medical Corp. reported a record revenue of approximately $5.3 million, an 87% increase year-over-year.

• Gross Profit Margin: Expanded to a robust 74.3% in Q3 2025, up from 63.1% in Q3 2024. This is a huge 1,119 basis point jump.
• Operating Profit Margin: The Q3 2025 operating loss was approximately $8.9 million (calculated from $5.3M revenue 74.3% gross margin minus $12.8M in operating expenses), resulting in an operating margin of roughly -167%.
• Net Profit Margin: The net loss for Q3 2025 improved to approximately $8.0 million, down from a net loss of $9.4 million in the prior year period.

The trend in profitability is one of strong operational leverage finally starting to show up. The gross margin expansion to 74.3% is a direct result of manufacturing operating at higher efficiency rates, a key sign of a successful scale-up for the TULSA-PRO system. That's a great sign for the long-term unit economics (the revenue and cost associated with a single sale).

Still, the company's operating expenses for Q3 2025 totaled approximately $12.8 million, up from $10.8 million a year ago, driven by increased headcount, sales force, and infrastructure to support the revenue growth. This is the necessary cost of building a global commercial footprint; you have to spend money to acquire new customers and install new systems.

Here's the quick math on how Profound Medical Corp. compares to the Medical Devices industry average, which is where the long-term opportunity lies:

The forecasted Return on Assets (ROA) of 62.53% is significantly higher than the industry's 13.47%, which suggests that once the company achieves scale and operating expenses stabilize, the TULSA-PRO system should generate superior returns on the assets deployed. The near-term challenge is clear: analysts still forecast a full-year 2025 net loss of around -$47.3 million, but the 87% revenue growth and improving gross margin show the path to breaking even is getting clearer. You're investing in a growth story with excellent margins, but one that is still burning cash. For a deeper look at the company's full financial picture, check out Breaking Down Profound Medical Corp. (PROF) Financial Health: Key Insights for Investors.

Debt vs. Equity Structure

When we look at how Profound Medical Corp. (PROF) funds its operations, the takeaway is clear: this is a company prioritizing equity and maintaining a remarkably low debt profile, which is typical for a growth-focused medical device firm still scaling its commercial efforts.

As of the second quarter of 2025, the company's capital structure shows a strong bias toward shareholder funding over borrowing. Its total long-term debt stood at approximately $4.5 million (USD in thousands), with effectively no short-term debt obligations, as the current portion of long-term debt was reported at $0 thousand on the June 30, 2025, balance sheet. That's a very clean debt picture.

The core health metric here is the Debt-to-Equity (D/E) ratio, which measures how much debt a company uses to finance its assets relative to the value of shareholders' equity. Profound Medical Corp.'s D/E ratio is exceptionally low, calculated at approximately 0.11 based on the Q2 2025 financials.

• Calculated D/E Ratio (Q2 2025): 0.11
• Surgical/Medical Instruments Industry Median (2024): 0.70

For context, the median D/E ratio for the Surgical and Medical Instruments and Apparatus industry is closer to 0.70. Profound's 0.11 ratio tells you they are significantly less leveraged than their peers, which is a sign of financial stability but also reflects their reliance on other forms of capital to fund their cash burn. The low leverage is a huge plus for financial risk.

The company's financing history shows a preference for equity to fuel its growth and R&D. While the current long-term debt primarily stems from an existing term loan with CIBC Innovation Banking, the recent financing activity has been squarely on the equity side. Profound has executed public offerings of common shares in both 2024 and 2023. This approach-raising capital by issuing new shares (diluting ownership) rather than taking on more debt-is a common trade-off for high-growth, pre-profitability MedTech firms.

The cash flow statement for the six months ended June 30, 2025, shows repayments of long-term debt totaling $290 thousand, indicating the company is meeting its existing obligations but not aggressively taking on new ones. Given the significant net loss of $15.7 million in Q2 2025 alone due to scaling costs, analysts have noted that if the company misses its ambitious 70% to 75% revenue growth target for 2025, it will likely necessitate another equity offering to cover the difference. The management has even received inquiries about potential future financing plans, including a shelf registration statement, which signals that further equity funding is a live option. For a deeper dive into who is buying these shares, you should read Exploring Profound Medical Corp. (PROF) Investor Profile: Who's Buying and Why?

Here's a quick snapshot of the debt structure:

The company is essentially using its balance sheet strength-low debt and high equity-as a buffer to fund its commercial expansion, but that runway is finite without reaching profitability or securing more equity.

Liquidity and Solvency

You want to know if Profound Medical Corp. (PROF) has enough cash to keep the lights on and fund its growth, and the short answer is yes, for now, but the cash burn rate is the key metric to watch. The company's liquidity ratios are exceptionally strong, yet the cash balance is shrinking rapidly as they invest heavily in commercialization.

Let's look at the near-term picture. A company's liquidity position tells you how easily it can cover its short-term debts. Profound Medical Corp. (PROF) shows robust metrics here, with a TTM (Trailing Twelve Months) Current Ratio of 4.18 and a Quick Ratio (or Acid-Test Ratio) of 3.32 for the 2025 fiscal year. For context, anything over 2.0 for the Current Ratio is usually considered very healthy, so these numbers are defintely a strength.

The Quick Ratio, which strips out inventory-often the least liquid current asset-is still very high at 3.32. This suggests that even without selling off its inventory of TULSA-PRO® consumables and equipment, the company has ample liquid assets like cash and accounts receivable to meet its immediate obligations. This is a sign of excellent short-term financial flexibility.

• Current Ratio (TTM 2025): 4.18.
• Quick Ratio (TTM 2025): 3.32.
• Both ratios signal strong short-term solvency.

Analysis of Working Capital Trends and Cash Flow

The working capital position is strong, but the trend in cash flow is the critical risk factor. While the ratios are high, they are masking a significant cash outflow. The company is in a heavy growth and commercialization phase, which requires substantial investment, and that shows up in the cash flow statements, even if we only see the net effect on the balance sheet.

Here's the quick math on the cash burn: Profound Medical Corp. (PROF)'s cash and cash equivalents balance has been declining throughout 2025. It went from approximately $46.4 million at the end of Q1 2025 to $35.2 million at the end of Q2 2025, and then dropped further to $24.8 million as of September 30, 2025. This means the company burned about $10.4 million in cash during the third quarter alone. This cash burn is significantly higher than the reported Q3 2025 net loss of $8.0 million, indicating that the net cash used in operating and investing activities is outpacing the non-cash adjustments.

The cash flow statement overview, inferred from these changes, points to a clear pattern:

• Operating Cash Flow: Significantly negative, driven by a net loss of $8.0 million in Q3 2025 and high operating expenses of $12.8 million. This reflects the cost of expanding the sales force and R&D for growth.
• Investing Cash Flow: Likely negative, as the company continues to install its TULSA-PRO® systems (70 installed as of Q3 2025) and invest in capital equipment.
• Financing Cash Flow: Has been relatively quiet this year, meaning the company has been funding its operations primarily from its existing cash reserves, not through new debt or equity raises.

The table below summarizes the cash trend, which is a direct reflection of the net cash flow (cash burn) for the respective periods:

The cash balance is decreasing by over $10 million per quarter. This is the core liquidity concern.

Potential Liquidity Concerns and Strengths

The strength is the high quality of the balance sheet today: the Current and Quick Ratios of 4.18 and 3.32 are fantastic. The concern, however, is the velocity of the cash burn. At a burn rate of around $10 million per quarter, the remaining $24.8 million in cash as of Q3 2025 gives the company only about 2.5 quarters of runway before needing to raise more capital, assuming the burn rate doesn't increase further.

Management is optimistic, expecting cash burn to decrease as revenue grows (Q3 2025 revenue was a record $5.3 million, up 87% year-over-year) and margins remain high at 74.3%. But, the company is still facing uncertainty in future financing to support its growth initiatives. The need for a capital raise is a near-term reality if the current cash burn rate persists into 2026.

For a deeper dive into the company's growth strategy and market position, check out Breaking Down Profound Medical Corp. (PROF) Financial Health: Key Insights for Investors.

Next Step: Monitor the Q4 2025 cash balance and any announcements regarding a new financing round, as this will directly impact the stock's near-term volatility.

Valuation Analysis

You're looking at Profound Medical Corp. (PROF) and wondering if the market has it right. Is it overvalued, or is there a deep discount hidden in the financials? The short answer is that traditional metrics suggest a high valuation, but that's typical for a high-growth medical device company that is not yet profitable. The consensus from Wall Street, however, points to a significant upside, suggesting the market is defintely underpricing its future potential.

As of mid-November 2025, the stock trades around $6.45, giving the company a market capitalization of approximately $195 million. This valuation is a bet on their TULSA-PRO platform's commercial success, not on current earnings.

Here's the quick math on the key valuation ratios based on the most recent data:

• Price-to-Earnings (P/E) Ratio: Not meaningful. Profound Medical Corp. is a loss-making growth company, with a forecasted full-year 2025 loss of approximately -$1.46 per share. A negative P/E ratio simply confirms it's in the investment phase, not the harvest phase.
• Price-to-Book (P/B) Ratio: The P/B ratio stands at 6.31. This is high, telling you that investors are valuing the company's intellectual property (IP) and future growth prospects-the TULSA-PRO system-at more than six times the value of its net tangible assets.
• Enterprise Value-to-EBITDA (EV/EBITDA): This is also not a useful metric right now. The company's Enterprise Value (EV) is around $183 million, but its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is negative due to high operating expenses like R&D and sales expansion.

What matters more for a company like this is the Price-to-Sales (P/S) ratio, which is a hefty 14.19 based on its trailing twelve-month (TTM) revenue of $14.3 million through Q3 2025. This P/S ratio is high, but it's what you pay for a medical technology firm that just reported Q3 2025 revenue growth of 87% year-over-year to $5.3 million.

The stock's performance over the last year shows the volatility inherent in a growth story. The 52-week trading range has been from a low of $3.78 to a high of $8.54. The stock has seen a strong surge recently, up over 18.92% month-to-date in November 2025, fueled by strong Q3 results and new distribution agreements in markets like Saudi Arabia.

You won't find income here; Profound Medical Corp. is not a dividend stock. The dividend yield is 0.00% as they correctly reinvest all capital back into scaling the business and expanding their TULSA-PRO installed base, which they expect to reach at least 75 systems by year-end 2025.

The Street's conviction is strong. The analyst consensus is a 'Strong Buy,' with an average 12-month price target of $11.00. This target implies an upside of over 81.22% from the current price, suggesting Wall Street sees the current valuation as significantly undervalued relative to their projections for TULSA-PRO adoption and revenue growth in 2026 and beyond. This is a classic growth-stock scenario: pay a high multiple today for massive expected growth tomorrow. For a deeper dive into the operational side, check out Breaking Down Profound Medical Corp. (PROF) Financial Health: Key Insights for Investors.

Risk Factors

You need to look past the impressive revenue growth-up 87% to $5.3 million in Q3 2025-and face the core financial reality: Profound Medical Corp. (PROF) is still burning cash at a rate that demands attention. The biggest near-term risk is liquidity, plus the execution risk tied to their ambitious sales targets.

Here's the quick math on the financial tightrope: as of September 30, 2025, the company held about $24.8 million in cash. Analysts forecast a non-GAAP loss of $1.75 per share over fiscal years 2025 and 2026, which could deplete nearly all of that cash, forcing another equity offering (dilution) or high-interest debt to cover the difference. A current Altman Z-Score of 1.49 also signals financial distress, despite the strong revenue growth. You have to anticipate another capital raise.

• Financial Risk: High cash burn rate necessitates future dilution.
• Operational Risk: Sales execution must deliver on the 70%-75% annual growth guidance.
• Clinical Risk: Long-term TULSA-PRO efficacy still faces scrutiny.

The operational and strategic risks are also significant. Management is guiding for 70%-75% revenue growth for the full year 2025, but they have a history of falling short, and Q2 2025 saw delays in capital sales. The company's success hinges on hitting a target of at least 75 TULSA-PRO system installations by the end of 2025, up from 70 in Q3 2025. If the sales team, which was recently streamlined, can't convert the current sales pipeline of 93 systems, that revenue target is at risk.

External pressures are constant, especially in the competitive medical device space. Profound Medical Corp.'s TULSA-PRO system faces intense competition from similar devices for prostate cancer and benign prostatic hyperplasia (BPH) treatment. Plus, new cancer treatments are always emerging, which could shrink the addressable patient population for TULSA-PRO. To be fair, the company is actively pursuing national and regional commercial payer coverage, which is a critical step for broader adoption and revenue stability.

The clinical and regulatory landscape presents its own set of challenges. While TULSA-PRO is innovative, some studies have raised questions about its long-term efficacy, noting that clinically significant prostate cancer recurred in almost 50% of patients at the 12-month follow-up in one report. Also, as a Canadian company manufacturing its devices there but doing most business in the U.S., the ongoing threat of tariffs adds an unpredictable geopolitical risk to the supply chain and cost of goods.

The company's mitigation strategies are centered on execution and market expansion:

The focus on growing recurring revenue, which hit $4.1 million in Q3 2025, is defintely the right move to stabilize the model. For a deeper dive into who is betting on these mitigation efforts, you should read Exploring Profound Medical Corp. (PROF) Investor Profile: Who's Buying and Why?

Your next step should be to model the cash runway based on the Q3 2025 operating expense run rate of $12.8 million to determine the precise timing of the next likely capital raise.

Growth Opportunities

You're looking at Profound Medical Corp. (PROF) and wondering where the real money will come from next, which is the right question for a growth-stage medical device company. The short answer is that the company's near-term trajectory is pinned on two things: accelerating sales of its core technology and validating its clinical superiority against traditional surgery.

Management is defintely pushing for aggressive growth. They are guiding for full-year 2025 revenue growth of approximately 70% to 75% over 2024, a significant jump that hinges on converting a robust sales pipeline. For context, the third quarter of 2025 already delivered a strong signal, with revenue hitting approximately $5.3 million, an impressive 87% year-over-year increase. Here's the quick math: if 2024 revenue was around $11.1 million, a 75% increase puts 2025 revenue near $19.4 million. Still, analysts are cautious, with the consensus 2025 Earnings Per Share (EPS) estimate sitting at a loss between -$1.46 and -$1.58, showing that this is a capital-intensive growth story for now.

The core growth drivers are clear and actionable:

• Product Innovation: Launching the new TULSA-AI Volume Reduction Module for Benign Prostatic Hyperplasia (BPH) expands the addressable market beyond just prostate cancer.
• Sales Model Shift: The pivot to a capital-driven sales model is accelerating the installed base. The TULSA-PRO installed base grew to 70 systems in Q3 2025, and the company still expects to reach at least 75 installs by year-end.
• Market Expansion: A new strategic distribution agreement, signed in November 2025, with Getz Healthcare opens up the Australia and New Zealand markets for TULSA-PRO.

The biggest near-term opportunity, however, is the clinical validation from the pivotal CAPTAIN trial. This trial compares TULSA-PRO to robotic radical prostatectomy (surgery). Initial clinical outcomes data is expected in December 2025, and positive results could fundamentally change the market. Management believes this data will likely lead to new guidelines from relevant cancer societies, essentially mandating that patients be informed of the TULSA Procedure as a primary option.

Profound Medical Corp. (PROF) holds a key competitive advantage: the TULSA-PRO system is the only AI-powered, MR-guided robotic system for prostate therapy. This incision-free approach, which uses real-time MRI thermography and autonomous temperature control, offers a level of precision that surgery and traditional radiation cannot match. Plus, the company saw its gross margin jump to 74.3% in Q3 2025, a sign of improving manufacturing efficiency and scale. The system's versatility is also a strength, treating a wide variety of prostate disease patients, including cancer, BPH, and salvage cases, which you can read more about here: Mission Statement, Vision, & Core Values of Profound Medical Corp. (PROF).

The qualified sales pipeline for new systems stands at 93 in the verification, negotiation, and contracting stages, which is a strong indicator of future capital sales. What this estimate hides, though, is the inherent lumpiness of capital equipment sales; a few delayed contracts can significantly impact quarterly revenue, as we saw earlier in 2025. You need to watch the conversion rate of that pipeline very closely.

Here is a snapshot of the forward-looking financial picture based on recent analyst consensus:

The next action for you is to monitor the December CAPTAIN trial data release; that single event will be the most significant catalyst for the stock in the near term.