Heartflow, Inc. Common Stock 2026 Q2 Earnings Call

Please go ahead. Good afternoon, everyone, and welcome to the HeartFlow second quarter 2026 earnings conference call.

Joining me today are John Farquhar, HeartFlow's President and Chief Executive Officer, and Vikram Verghese, our Chief Financial Officer. Today we will walk you through our Q2 performance, share updates on our commercial momentum, innovation pipeline, and clinical programs, and provide financial guidance. A live Q&A session will follow. The earnings release accompanying today's discussion is available on our investor relations website at ir.heartflow.com. During this call, we will refer to certain non-GAAP financial measures. Reconciliations to the most comparable GAAP figures can be found in today's earnings release. I'd like to remind everyone that certain statements made on this call are forward-looking within the meaning of federal securities laws. These statements are based on management's current expectations and beliefs, involve certain risks and uncertainties, and actual results may differ materially.

Please note that both this live call and a digital replay will be available shortly after the call concludes. With that, I will now turn the call over to John Farquhar, our CEO.

Thank you for joining us. Q2 was an outstanding quarter for HeartFlow, and the momentum that we entered 2026 with is accelerating. Our year-over-year revenue growth accelerated for the second consecutive quarter, and we finished ahead of our expectations. A credit to our expanding category leadership and the continued strong growth of the CCTA market. It's also a credit to the outstanding efforts of the HeartFlow team and their continued dedication to the patients we serve. Thank you all for your hard work and commitment. In the second quarter, revenue was $64.1 million, up 48% year-over-year, with U.S. revenue up 51%. This was our fastest revenue growth in eight quarters. Four factors drove this performance. First, plaque accelerated across new activations and physician utilization. Second, FFRCT utilization remained durable across our existing accounts.

Third, we had another strong quarter for new account additions and the record cohort of 340 accounts we added in 2025 continued to ramp in line with our expectations. Finally, the underlying CCTA market continued to expand, supported by guidelines and strong reimbursement and growing interest in CT as a frontline diagnostic test for suspected CAD. The strength of our second quarter performance gives us confidence to raise our full-year outlook again. We now expect to deliver total revenue of $246 million to $250 million, representing 40%-42% year-over-year growth. We are also raising our full-year 2026 plaque revenue outlook to a range of $29 million to $31 million. We are also raising our full-year guidance for plaque activated accounts to approximately 1,250.

Moving down the P&L, we are raising our non-GAAP gross margin guidance to approximately 82%, driven by ongoing AI efficiencies, volume leverage, and a higher mix of high-margin plaque revenue. At the midpoint of our revenue guidance, this implies year-over-year non-GAAP gross profit growth of nearly 50%. Finally, we remain committed to our midterm non-GAAP gross margin target of 85%. Now turning to our three strategic pillars, commercial adoption, innovation, and clinical evidence. I will walk you through each, starting first with commercial adoption. Our installed base of accounts continues to grow rapidly. We had another very strong quarter of new account additions, and we continue to win at a high rate, strengthening our growing category leadership and ability to drive broader platform utilization. Now turning to plaque, performance was again ahead of our expectations with accelerating activations and utilizations.

Activations were ahead of plan, highlighting the leverage of our installed base and our ability to deploy new innovation rapidly. Trends in physician utilization are very strong and give me high confidence in our continued momentum. Time and time again, we are winning at the point of sale with plaque, and there are many reasons for this, but none more important than accuracy and reproducibility. HeartFlow Plaque Analysis has demonstrated in peer-reviewed prospective studies market-leading accuracy and reproducibility across our research and independent clinical studies. ACC's scientific statement on industry standards for the use of quantitative plaque analysis underscores that independently validated accuracy and reproducibility are foundational for clinical use. These standards align directly with HeartFlow's differentiated evidence base and technology platform, and we believe the market appreciates this fact.

Furthermore, we are proud to share that HeartFlow was recently selected as the exclusive plaque provider for the PREEMPT Study, an NIH-funded 1,500-patient study evaluating whether directly measuring coronary disease can improve prevention in younger asymptomatic patients. We believe this selection reflects the clinical community's confidence in our plaque technology's accuracy and reproducibility. Bottom line, our plaque performance in Q2 supports both our higher 2026 outlook and long-term conviction. Shifting now to FFRCT. Performance in Q2 also exceeded our expectations. Utilization remains durable across our existing accounts, and the record 2025 cohort of 340 accounts continues to ramp in line with our expectations. So far this year, early utilization trends from our 2026 new account cohort is also encouraging. As is the case with plaque, these results are also enabled by meaningful product differentiation.

Not only is FFRCT the most accurate non-invasive test for CAD, it's also the only product with lesion-specific FFRCT values and the only test with published prospective validation against the invasive gold standard. Importantly, the recently updated expert consensus guidelines from SCCT and endorsed by ACC underscored the importance of lesion-specific FFRCT in identifying coronary lesions that may warrant an intervention. Lastly, I'd be remiss if I didn't also recognize the power of our platform in these results. Our clinical evidence and technology differentiation is second to none. The breadth of our AI diagnostics platform across RoadMap, Plaque, FFRCT, and PCI Navigator deepens our clinical relationships and makes HeartFlow increasingly important to their clinical workflows, creating a durable strategic advantage. In Q2, this dynamic is reflected in our strong results, and I'm confident it will continue in Q3 and beyond. Now turning to our second pillar, innovation.

Our investments in R&D continue to produce market-leading innovation. At SCCT in July, we launched HeartFlow Plaque Staging, the most clinically validated tool for patient risk stratification. Plaque Staging translates the personalized disease burden itself into four clinically distinct stages that help physicians assess the severity and guide medical management. It's validated in more than 23,000 patients with up to 16 years follow-up, with significant separation in events by stage after adjusting for traditional risk factors and stenosis. We expect it to be another tailwind for Plaque adoption in the second half of 2026 and into 2027. PCI Navigator launched earlier this year and is gaining strong traction and remains on track for a broader rollout in 2027. Interventional cardiologists are gaining a level of pre-procedural certainty they simply did not have before.

With PCI Navigator, they can now enter the cath lab with a more informed procedural plan already in hand. Navigator is uniquely differentiated by HeartFlow's lesion-specific FFRCT and rich plaque information, bringing together the insights needed to plan a PCI with greater precision. Importantly, Navigator is also strengthening our position within new accounts. Interventional cardiologists are an influential constituency in health systems, and their advocacy for a CT-first pathway into their cath lab helps accelerate HeartFlow adoption and new account acquisition. Now turning to our third pillar, clinical evidence. The breadth and quality of evidence supporting the HeartFlow platform remains unmatched in the category. As I mentioned on last quarter's call, we have more than 625 peer-reviewed publications and over 200 clinical studies, and we continue to build on this foundation.

Most recently at SCCT's annual meeting in July, we presented eight new data sets spanning more than 36,000 patients, further validating the accuracy, reproducibility, and clinical utility of the HeartFlow Plaque Analysis. Let me highlight just two. First, we demonstrated the precision and reproducibility of HeartFlow Plaque Analysis. In a blinded prospective study recently published in the Journal of the American College of Cardiology, we demonstrated minimal variability in repeat scans. This data gives physicians further confidence that changes in plaque measured over time accurately reflects true changes in a patient's actual disease. Second, we demonstrated how HeartFlow Plaque Analysis provides a more complete assessment of disease burden than a calcium score alone. In a DECIDE registry analysis of nearly 12,000 symptomatic patients, HeartFlow Plaque Staging reclassified half of patients with a calcium score of zero into a higher risk category by identifying non-calcified plaque that calcium scoring cannot detect.

This data gives physicians a more precise picture of their patient's actual disease burden to help optimize treatment. As excited we are about the progress we've made in the second quarter, we're even more enthusiastic about what the future holds. From a new product perspective, the development of Plaque Tracker remains on track to launch in 2027. HeartFlow Plaque Tracker measures a patient's plaque changes over time using serial CCTA scans and our Plaque Analysis. Importantly, tracking change only works if you can separate real changes in disease from noise. To do this, it takes best-in-class accuracy and reproducibility, which we believe is what our category-leading plaque algorithm delivers. Our autonomous processing initiative, which we announced last quarter as a key driver underpinning our midterm 85% gross margin target, is also progressing well and remains on track for a broader rollout in 2027.