Spectral AI Announces 2025 First Quarter Financial Results
- R&D revenue increased 6.0% to $6.7 million in Q1 2025
- Net income of $2.9 million, compared to $3.2 million loss in Q1 2024
- Improved gross margin to 47.2% from 46.6%
- Secured $15 million debt financing agreement with $8.5 million initial draw
- Raised additional $2.7 million in equity financing
- Successful completion of Burn Validation Study showing superior performance
- Reduced G&A expenses to $4.1 million from $5.1 million
- Revenue guidance of $21.5M excludes potential DeepView System sales
- Still pending FDA De Novo submission and approval
- Took on significant debt with $15 million financing agreement
Insights
Spectral AI reports mixed Q1 results with modest revenue growth, improved cash position, and progress toward FDA submission, though commercialization remains pending.
Spectral AI's Q1 2025 results demonstrate modest improvement in key financial metrics. The company reported
The gross margin saw a slight improvement to
The company's balance sheet strengthened significantly, with cash increasing to
The net income of
Looking forward, management reiterated
Spectral AI's burn validation study completion and pending FDA submission represent critical milestones, though commercial impact remains uncertain.
The completion of Spectral AI's burn validation study represents a significant clinical milestone for the company's DeepView technology platform. With data from 164 patients (115 adult, 49 pediatric) across multiple burn centers and emergency departments, this stands as one of the largest burn studies conducted in the United States. The company's claim that their AI diagnostic system "outperform[s] the clinical judgment of burn physicians by a large margin" is particularly noteworthy, suggesting potentially disruptive technology in a field where assessment timing and accuracy directly impact patient outcomes.
The DeepView System's core value proposition centers on its ability to predict burn wound healing potential on the first day of injury—a critical decision point for treatment planning. Current standard practice often requires 2-3 days of observation before definitive treatment decisions, so a validated day-one diagnostic tool could significantly accelerate care pathways, potentially reducing hospitalization duration and improving outcomes.
The company's imminent FDA De Novo submission targeted for H1 2025 represents the culmination of their clinical development program. The De Novo pathway is specifically designed for novel devices without substantial equivalents in the market, indicating the innovative nature of their technology but also highlighting the regulatory uncertainty inherent in pioneering medical devices. While the validation study results appear promising, the FDA review process typically subjects clinical data to rigorous statistical scrutiny and can take 9-12 months for complex AI-based medical devices.
It's worth noting that despite progress toward commercialization, the company explicitly states their 2025 revenue guidance doesn't incorporate any contribution from DeepView System sales for burn indication. This suggests management is appropriately conservative about commercialization timelines given the pending regulatory review. The transition from R&D revenue (currently dependent on the BARDA contract) to commercial product revenue remains the critical inflection point for the company's long-term value proposition, but this transition depends entirely on successful regulatory approval and subsequent market adoption.
Q1 Overview
- Research & Development Revenue of
$6.7 Million - Improved Capital Structure Reflected in Cash of
$14.1 Million - Continued work on planned De Novo submission to the FDA in the first half of 2025
DALLAS, May 13, 2025 (GLOBE NEWSWIRE) -- Spectral AI, Inc. (Nasdaq: MDAI) (“Spectral AI” or the “Company”), an artificial intelligence (AI) company focused on medical diagnostics for faster and more accurate treatment decisions in wound care, today announced financial results for the first quarter ended March 31, 2025 and provided an update on its ongoing business activities.
“During the first quarter we continued to execute against our strategic plan and are working hard towards our De Novo submission to the FDA by the end of the first half of 2025,” said Dr. J. Michael DiMaio, M.D., the Company’s Chairman of the Board. “We made important strides in the validation of the diagnostic results of our DeepView™ System for burn indication through the completion of our Burn Validation Study in March, 2025. The goal of the Burn Validation Study was to further demonstrate the innovative and versatile nature of Spectral AI’s DeepView technology, as well as its ability to predict burn wound healing potential on the first day of injury with greater performance and speed than the methods currently used today. With the rigorous statistical analysis support, the DeepView System continues to outperform the clinical judgment of burn physicians by a large margin.”
Dr. DiMaio concluded, “I am pleased with the operating results through the first quarter of 2025 and our team remains dedicated as we continue to drive towards our FDA De Novo submission by the end of the first half of 2025; and I’m proud of the work of our team to realize this significant milestone in the Company’s history.”
SELECT BUSINESS HIGHLIGHTS
Clinical Trials
- The Burn Validation Study which concluded in March 2025, represented one of the largest burn trials ever conducted in the United States. The Company enrolled and analyzed data obtained from 164 total patients comprised of 115 adult and 49 pediatric patients in burn centers and emergency departments across the United States.
Corporate
- The Company satisfied all of its outstanding obligations relating to its SEPA (defined below) in February 2025.
- The Company completed a debt financing agreement of up to
$15.0 million from Avenue Capital Group, with an initial draw down of$8.5 million in March 2025. In connection with this debt financing, the Company also raised$2.7 million of equity financing from institutional and other new and existing investors. The capital raise provides significant support to Spectral AI’s product commercialization efforts, including the upcoming U.S. launch of its DeepView System.
Q1 2025 FINANCIAL RESULTS OVERVIEW
All comparisons are to the first quarter ended March 31, 2024 (“Q1 2024”) unless otherwise stated.
Research & Development Revenue¹
Research & Development Revenue for Q1 2025 rose
Gross Margin
Gross margin for Q1 2025 improved to
General & Administrative Expense
General & administrative expenses in Q1 2025 were reduced to
Other Income/(Expense)
Other income/(expense) in Q1 2025 increased
Net Income/(Loss)
The Company reported net income for Q1 2025 of
Financial Condition
As of March 31, 2025, cash improved to
As noted above, the Company completed a debt financing agreement of up to
Additionally, the Company satisfied the remaining payment obligations of its fixed price standby equity purchase agreement (“SEPA”) with a long-only investor in February, 2025.
2025 Guidance
The Company reiterates its revenue guidance of approximately
CONFERENCE CALL
The Company will host a conference call today at 5:00 pm Eastern Time to discuss these results.
Investors interested in participating in the live call can dial:
- 833-630-1956 – U.S.
- 412-317-1837 – International
A simultaneous webcast of the call may be accessed online from the Events & Presentations section of the Investor Relations page of the Company’s website at https://investors.spectral-ai.com/news-events/events.
About Spectral AI
Spectral AI, Inc. is a Dallas-based predictive AI company focused on medical diagnostics for faster and more accurate treatment decisions in wound care, with initial applications involving patients with burns. The Company is working to revolutionize the management of wound care by “Seeing the Unknown®” with its DeepView® System. The DeepView® System is being developed as a predictive device to offer clinicians an objective and immediate assessment of a burn wound’s healing potential prior to treatment or other medical intervention. With algorithm-driven results and a goal of exceeding the current standard of care in the future, the DeepView® System is expected to provide fast and accurate treatment insight towards value care by improving patient outcomes and reducing healthcare costs. For more information about the DeepView® System, visit www.spectral-ai.com.
Forward-Looking Statements
Certain statements made in this release are “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s strategy, plans, objectives, initiatives and financial outlook. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. As such, readers are cautioned not to place undue reliance on any forward-looking statements.
Investors should carefully consider the foregoing factors, and the other risks and uncertainties described in the “Risk Factors” sections of the Company’s filings with the SEC, including the Registration Statement and the other documents filed by the Company. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements.
For Media and Investor Relations, please contact:
David Kugelman
Atlanta Capital Partners LLC
(866) 692-6847 Toll Free – U.S. & Canada
(404) 281-8556 Mobile and WhatsApp
Email: dk@atlcp.com
| Spectral AI, Inc. Condensed Consolidated Balance Sheets (in thousands, except share and per share data) | ||||||||
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 14,061 | $ | 5,157 | ||||
| Accounts receivable, net | 2,103 | 2,505 | ||||||
| Inventory | 437 | 425 | ||||||
| Prepaid expenses | 1,287 | 1,289 | ||||||
| Other current assets | 840 | 746 | ||||||
| Total current assets | 18,728 | 10,122 | ||||||
| Non-current assets: | ||||||||
| Property and equipment, net | 164 | 2 | ||||||
| Right-of-use assets | 1,830 | 1,971 | ||||||
| Total Assets | $ | 20,722 | $ | 12,095 | ||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 3,113 | $ | 4,035 | ||||
| Accrued expenses | 3,712 | 3,210 | ||||||
| Deferred revenue | 663 | 960 | ||||||
| Lease liabilities, short-term | 474 | 201 | ||||||
| Notes payable, current | 244 | 422 | ||||||
| Notes payable – at fair value | - | 2,365 | ||||||
| Warrant liabilities | 5,106 | 6,451 | ||||||
| Total current liabilities | 13,312 | 17,644 | ||||||
| Note payable, long-term | 7,512 | - | ||||||
| Lease liabilities, long-term | 1,524 | 1,702 | ||||||
| Total Liabilities | 22,348 | 19,346 | ||||||
| Stockholders’ Deficit | ||||||||
| Preferred stock ( | - | - | ||||||
| Common stock ( | 2 | 2 | ||||||
| Additional paid-in capital | 43,684 | 40,973 | ||||||
| Accumulated other comprehensive income | 20 | 3 | ||||||
| Accumulated deficit | (45,332 | ) | (48,229 | ) | ||||
| Total Stockholders’ Deficit | (1,626 | ) | (7,251 | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | 20,722 | $ | 12,095 | ||||
| Spectral AI, Inc. Condensed Consolidated Statements of Operations (in thousands, except share and per share data) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Research and development revenue | $ | 6,707 | $ | 6,326 | ||||
| Cost of revenue | (3,539 | ) | (3,381 | ) | ||||
| Gross profit | 3,168 | 2,945 | ||||||
| Operating costs and expenses: | ||||||||
| General and administrative | 4,064 | 5,088 | ||||||
| Total operating costs and expenses | 4,064 | 5,088 | ||||||
| Operating loss | (896 | ) | (2,143 | ) | ||||
| Other income (expense): | ||||||||
| Net interest (expense) income | (20 | ) | 14 | |||||
| Borrowing related costs | (581 | ) | (276 | ) | ||||
| Change in fair value of warrant liability | 4,253 | 20 | ||||||
| Change in fair value of notes payable | 220 | 66 | ||||||
| Foreign exchange transaction loss, net | (8 | ) | (16 | ) | ||||
| Other income (expense), including transaction costs | - | (848 | ) | |||||
| Total other income (expense), net | 3,864 | (1,040 | ) | |||||
| Income (loss) before income taxes | 2,968 | (3,183 | ) | |||||
| Income tax provision | (71 | ) | (22 | ) | ||||
| Net income (loss) | $ | 2,897 | $ | (3,205 | ) | |||
_______________________________
¹ Research and Development Revenue consisted primarily of funding from the Biomedical Advanced Research and Development Authority (BARDA), part of the Administration for Strategic Preparedness and Response (ASPR) within the U.S. Department of Health and Human Services.
FAQ
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