HeartFlow (HTFL) Q2 FY26 earnings call: guidance and Q&A

What are the key factors driving the strong adoption of Plaque and how is HeartFlow differentiating itself from competitors?

Plaque launch is going very well with significant momentum. New account activations are ahead of plan, physician adoption metrics are strong, and utilization is ramping above initial expectations as physicians broaden its use. HeartFlow is winning due to market-leading accuracy and reproducibility, validated in peer-reviewed studies, and customers are increasingly choosing HeartFlow.

“So far this year, Q1 was a good first start, initial start, but coming out of Q2, these trends give me really higher confidence.”

asked by Robert Marcus · answered by John Farquhar

What are HeartFlow's thoughts on the recent MedTech as a Service reimbursement proposal from CMS and its potential impact?

The proposal was not a surprise and is consistent with CMS signals. In the near term, the 2027 proposal is positive for HeartFlow, with FFRCT and Plaque stable and CCTA up nearly 12%. Longer term, CMS acknowledging AI services are different and wanting to align payments with clinical outcomes aligns well with HeartFlow's value proposition and evidence. The company looks forward to collaborating with CMS on this multi-year process, likely impacting 2029.

“We think CMS is acknowledging something obvious, which is AI services are different than a traditional medical device, and we agree with them on that.”

asked by Robert Marcus · answered by John Farquhar

Was the Q2 revenue beat primarily driven by FFRCT, and if so, what factors contributed to the significant improvement in FFRCT performance?

Plaque revenue beat expectations by approximately $4 million. The overall beat was broad-based across both FFRCT and Plaque. Q2 is seasonally strong. FFRCT saw strong volume growth and demand from improving utilization in existing sites and successful ramping of new sites. Plaque also contributed significantly with strong utilization trends and increasing ordering physicians.

“Plaque revenues were $7.8 million, which was more close to $4 million beat against expectations. I'd say it was broad-based momentum across both FFRCT and Plaque.”

asked by Matthew O'Brien · answered by Vikram Verghese

What is HeartFlow seeing from a competitive standpoint in FFRCT and Plaque, and what are its market shares and competitive strategy?

HeartFlow views its primary competition as the standard of care, aiming to source volumes from traditional non-invasive tests. The CCTA market is only 11% penetrated and growing strongly. While other players exist, competition is not new and has not slowed HeartFlow down. The company feels confident in its competitive position and market leadership, winning in the field with both Plaque and FFRCT, as evidenced by strong metrics and guidance.

“So first thing I'll say, and I've said this before, you know, we view our competition as the standard of care.”

asked by Larry Biegelsen · answered by John Farquhar

Can you provide more details on the asymptomatic RCTs, including enrollment timelines, next steps, and whether FDA approval is required for this market expansion?

The asymptomatic opportunity is significant, and HeartFlow will approach it similarly to the symptomatic market, starting with high-risk patients. Three RCTs will target secondary prevention, patients with calcium, and patients with plaque, using existing technology, so no new FDA clearance is required. Endpoints will be changes in physician management, LDL, and soft plaque. These trials are capital-efficient (300-500 patients each) and synergistic, leveraging existing call points and sales channels. The goal is reimbursed technology in these markets before 2030.

“So to your question, no FDA clearance required. The 3 populations, the first is secondary prevention, so this is prior MIs or prior PCIs.”

asked by Brandon Vazquez · answered by John Farquhar

Discuss the operating leverage observed in Q2, how it will evolve, and the role of AI efficiency in future performance.

HeartFlow outperformed on the top line and reinvested disciplinedly into R&D, cutting EBIT roughly in half quarter-over-quarter, demonstrating business model efficiency. R&D increases are for Plaque Tracker, autonomous processing (which expands gross margins by reducing human touch), and TAM expansion trials. Medical education is also a key R&D spend. Field capacity will expand for Plaque. Despite investments, OPEX as a percentage of revenue is expected to improve by at least 5 points year-on-year for FY26, and EBIT should meaningfully improve. This reinforces conviction for profitability by 2028.

“Ultimately, it's the combination, the durability of the growth profile, the Plaque proof points, and the mid-term gross margin targets of 85% that reinforce a conviction of getting the company to profitability in that 2028 timeframe.”

asked by Frederick Wise · answered by Vikram Verghese

How did revenue per case and pricing dynamics fare this quarter, considering potential FFRCT price pressure and Plaque contribution?

For FFRCT, volumes were significantly above plan, and ASPs were modestly ahead due to a favorable customer mix, which is expected to be durable. Year-over-year FFRCT ASP shifts are expected to moderate starting in 2027. For Plaque, ASP favorability was driven by contractual step-ups and a beneficial mix towards higher-priced accounts. No further pricing changes are baked into the rest of 2026 guidance, but a more meaningful step-up is expected in early 2027.

“Now looking ahead, these pricing trends certainly reinforce our view that year-over-year ASP shifts will moderate beginning in 2027.”

asked by Frederick Wise · answered by Vikram Verghese

Any updates on the patent litigation or the CID, including milestones or key events?

Patent litigation typically follows a multi-year path. HeartFlow is confident in its claims and legal position, focusing on running the business while the process plays out. Regarding the CID, there are no updates beyond what has been shared. This matter is also expected to play out over years, not months, and is not a distraction. The company is fully cooperating.

“We're very confident in our claims. The complaint's public. I'm sure you've read it. If not, it's out there. I think it speaks for itself.”

asked by Unknown Analyst · answered by John Farquhar