Heartflow Revenue Soars 40%, Net Loss Narrows on Convertible Note Boost

TL;DR

**HTFL is burning cash but revenue growth and a new debt raise could stabilize the ship, making it a speculative buy.**

AI Summary

Heartflow, Inc. reported a significant increase in revenue for the three months ended June 30, 2025, reaching $43.424 million, up from $31.054 million in the prior year, representing a 40% increase. For the six months ended June 30, 2025, revenue grew to $80.629 million from $57.897 million, a 39.3% increase. Despite this revenue growth, the company recorded a net loss of $9.196 million for the quarter, a substantial improvement from the $23.379 million net loss in the same period of 2024. The six-month net loss also improved to $41.541 million from $44.311 million. Key business changes include a new convertible notes offering, which brought in $72.813 million in net proceeds, significantly boosting cash and cash equivalents to $80.210 million as of June 30, 2025, from $51.367 million at December 31, 2024. Operating expenses increased, with research and development rising to $15.032 million from $9.932 million for the quarter, and selling, general and administrative expenses increasing to $31.461 million from $28.084 million. The company's strategic outlook appears focused on continued growth and managing its substantial accumulated deficit, which reached $1.012 billion as of June 30, 2025.

Why It Matters

Heartflow's strong revenue growth of 40% quarter-over-quarter signals increasing adoption of its technology, which is crucial for a medical device company in a competitive landscape. The significant reduction in net loss, from $23.379 million to $9.196 million, demonstrates improved operational efficiency and a clearer path towards profitability, which is a positive for investors. The successful convertible notes offering, raising $72.813 million, provides essential capital for continued R&D and market expansion, allowing Heartflow to compete more effectively against larger players. This financial maneuver also impacts employees by securing the company's short-term future and customers by ensuring ongoing product development and support.

Risk Assessment

Risk Level: medium — Heartflow, Inc. reported an accumulated deficit of $1.012 billion as of June 30, 2025, indicating a history of significant losses. While net loss improved, the company still used $40.470 million in cash from operating activities during the six months ended June 30, 2025, demonstrating ongoing cash burn despite revenue growth.

Analyst Insight

Investors should monitor Heartflow's cash burn rate and the impact of the new convertible notes on future interest expenses. While revenue growth is positive, the substantial accumulated deficit and continued operating cash outflow suggest a need for sustained financial improvement before considering a long-term position.

Financial Highlights

debt To Equity

N/A

revenue

$43.424M

operating Margin

N/A

total Assets

$159.363M

total Debt

$182.423M

net Income

-$9.196M

eps

N/A

gross Margin

N/A

cash Position

$80.210M

revenue Growth

+40%

Key Numbers

• $43.424M — Quarterly Revenue (Increased 40% from $31.054M in Q2 2024)
• $9.196M — Quarterly Net Loss (Improved from $23.379M in Q2 2024)
• $80.629M — Six-Month Revenue (Increased 39.3% from $57.897M in H1 2024)
• $41.541M — Six-Month Net Loss (Improved from $44.311M in H1 2024)
• $72.813M — Convertible Notes Proceeds (New financing activity in H1 2025)
• $80.210M — Cash and Cash Equivalents (Increased from $51.367M at Dec 31, 2024)
• $1.012B — Accumulated Deficit (Total accumulated losses as of June 30, 2025)
• $40.470M — Net Cash Used in Operating Activities (For the six months ended June 30, 2025)
• 40% — Revenue Growth (QoQ) (Percentage increase in revenue from Q2 2024 to Q2 2025)
• 83,396,102 — Shares Outstanding (As of August 31, 2025)

Key Players & Entities

• Heartflow, Inc. (company) — Registrant
• Nasdaq Stock Market LLC (company) — Exchange where common stock is registered
• $43.424 million (dollar_amount) — Revenue for Q2 2025
• $31.054 million (dollar_amount) — Revenue for Q2 2024
• $9.196 million (dollar_amount) — Net loss for Q2 2025
• $23.379 million (dollar_amount) — Net loss for Q2 2024
• $72.813 million (dollar_amount) — Net proceeds from convertible notes offering
• $80.210 million (dollar_amount) — Cash and cash equivalents as of June 30, 2025
• $1.012 billion (dollar_amount) — Accumulated deficit as of June 30, 2025
• SEC (regulator) — Securities and Exchange Commission

FAQ

Risk Factors

• Substantial Accumulated Deficit and Need for Future Financing [high — financial]: Heartflow has a significant accumulated deficit of $1.012 billion as of June 30, 2025. While recent convertible notes offering provided $72.813 million in proceeds, the company's continued losses and substantial deficit indicate a potential ongoing need for external financing to fund operations and growth initiatives.
• Increasing Operating Expenses [medium — operational]: Research and development expenses increased to $15.032 million for the quarter ended June 30, 2025, up from $9.932 million in the prior year. Selling, general and administrative expenses also rose to $31.461 million from $28.084 million. This upward trend in operating costs, while potentially supporting growth, puts pressure on profitability.
• Convertible Notes and Derivative Liabilities [medium — financial]: The company issued convertible notes totaling $68.336 million and incurred a derivative liability of $29.407 million as of June 30, 2025. These financial instruments introduce complexity and potential future dilution or cash outflow depending on conversion terms and market conditions.
• Competition in the Medical Device Market [medium — market]: The medical device industry, particularly in cardiovascular diagnostics, is highly competitive. Heartflow faces competition from established players and emerging technologies, requiring continuous innovation and market penetration to maintain and grow its revenue.
• Regulatory Approval and Compliance [high — regulatory]: As a medical technology company, Heartflow is subject to stringent regulatory oversight from bodies like the FDA. Maintaining compliance and obtaining necessary approvals for its products and any future innovations are critical and can be time-consuming and costly.

Industry Context

Heartflow operates in the highly competitive and rapidly evolving medical technology sector, specifically focusing on non-invasive diagnostic solutions for coronary artery disease. The industry is characterized by significant R&D investment, stringent regulatory hurdles, and a need for continuous innovation to gain market share against both established players and disruptive startups. Trends include a shift towards personalized medicine and value-based care, demanding more accurate and cost-effective diagnostic tools.

Regulatory Implications

As a medical device company, Heartflow is subject to rigorous regulatory scrutiny from agencies like the FDA. Compliance with quality system regulations, post-market surveillance, and obtaining necessary approvals for product modifications or new devices are critical. Any failure to comply can result in significant penalties, product recalls, or market access restrictions, directly impacting financial performance and operational continuity.

What Investors Should Do

1. Monitor the burn rate and cash runway closely, given the ongoing net losses, despite the recent financing.
2. Analyze the impact of increasing R&D and SG&A expenses on future profitability and operational efficiency.
3. Evaluate the terms and potential dilution associated with the convertible notes and derivative liabilities.
4. Assess the company's competitive positioning and ability to scale revenue growth against increasing operating costs.

Key Dates

• 2025-06-30: Quarter End and Six-Month Period End — Reporting period for the 10-Q, showing significant revenue growth but continued net losses, offset by new financing.
• 2025-08-31: Shares Outstanding Date — Indicates the number of shares outstanding as of a recent date, relevant for per-share calculations and market capitalization.
• 2024-06-30: Prior Year Quarter End — Benchmark for year-over-year revenue growth (40%) and net loss improvement.
• 2024-12-31: Prior Year End — Benchmark for cash and cash equivalents, showing a substantial increase by June 30, 2025.

Glossary

Accumulated Deficit

The total cumulative net losses of a company since its inception, minus any cumulative net income. It represents the total losses that have not been offset by profits. (Heartflow has a substantial accumulated deficit of $1.012 billion, indicating a history of net losses and highlighting the need for future profitability or financing.)

Convertible Notes

Debt securities that can be converted into a predetermined amount of the issuer's equity (stock) at certain times during their life. (Heartflow issued $68.336 million in convertible notes, which impacts its debt structure and could lead to future equity dilution.)

Derivative Liability

A liability arising from a financial derivative contract, such as an option or a future, whose value is derived from an underlying asset or index. (The company recognized a derivative liability of $29.407 million, suggesting complex financial arrangements that require careful monitoring.)

Operating Lease Liabilities

Obligations to make payments for the use of an asset over a specified period, as per lease agreements, recognized under accounting standards for leases. (These liabilities, both current ($5.492M) and non-current, represent ongoing commitments for leased assets, impacting the company's financial obligations.)

Year-Over-Year Comparison

Compared to the prior year's comparable periods, Heartflow has demonstrated robust revenue growth, with a 40% increase in quarterly revenue and a 39.3% increase in six-month revenue. While net losses have improved significantly, they remain substantial. The company has strengthened its cash position through a new convertible notes offering, increasing cash and cash equivalents by over $28 million since year-end 2024. Operating expenses, particularly R&D, have increased, reflecting investment in growth, but also contributing to the net loss.

Key Financial Figures

• $0.001 — nge on which registered Common Stock, $0.001 par value per share HTFL The Nasdaq

Filing Documents

• htfl-20250630.htm (10-Q) — 4403KB
• exhibit101-q2202510xq.htm (EX-10.1) — 303KB
• exhibit103-q2202510xq.htm (EX-10.3) — 53KB
• exhibit104-q2202510xq.htm (EX-10.4) — 53KB
• exhibit105-q2202510xq.htm (EX-10.5) — 43KB
• exhibit108-q2202510xq.htm (EX-10.8) — 21KB
• exhibit311-q2202510xq.htm (EX-31.1) — 10KB
• exhibit312-q2202510xq.htm (EX-31.2) — 11KB
• exhibit321-q2202510xq.htm (EX-32.1) — 5KB
• exhibit322-q2202510xq.htm (EX-32.2) — 5KB
• 0001464521-25-000012.txt ( ) — 16954KB
• htfl-20250630.xsd (EX-101.SCH) — 71KB
• htfl-20250630_cal.xml (EX-101.CAL) — 78KB
• htfl-20250630_def.xml (EX-101.DEF) — 333KB
• htfl-20250630_lab.xml (EX-101.LAB) — 808KB
• htfl-20250630_pre.xml (EX-101.PRE) — 625KB
• htfl-20250630_htm.xml (XML) — 3210KB

: Financial Information

Part I: Financial Information 4 Item 1. Condensed Consolidated Financial Statements 4 Condensed Consolidated Balance Sheets 4 Condensed Consolidated Statements of Operations and Comprehensive Loss 5 Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Deficit 6 Condensed Consolidated Statements of Cash Flows 7 Notes to Condensed Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of

Management's Discussion and Analysis of Financial Condition and Results of Operations 40 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 52 Item 4.

Controls and Procedures

Controls and Procedures 53

: Other Information

Part II: Other Information 54 Item 1.

Legal Proceedings

Legal Proceedings 54 Item 1A.

Risk Factors

Risk Factors 54 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 103 Item 3. Defaults Upon Senior Securities 104 Item 4. Mine Safety Disclosures 104 Item 5. Other Information 104 Item 6. Exhibits 105

SIGNATURES

SIGNATURES 106 3 Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains express or implied forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. We intend such forward-looking statements contained in this Quarterly Report on Form 10-Q to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than strategy, future financial condition, future operations, projected costs, prospects, plans, objectives of management, and expected market growth, are forward-looking statements. In some cases, you can identify

forward-looking statements by words such as "may," "will," "shall," "should," "expects," "plans," "anticipates,"

forward-looking statements by words such as "may," "will," "shall," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," "goal," "objective," "seeks," or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions.

Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to,

Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, products, anticipated product launches, the impact of macroeconomic conditions, industry and business trends, and our expectations regarding business strategy, plans, market growth, regulatory climate, competitive landscape and our objectives for future operations. You should not rely on forward-looking statements as predictions of future events. We have based the forward- looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations, estimates, forecasts, and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form 10-Q, we cannot guarantee that the future results, levels of activity, performance, or events and circumstances reflected in the forward-looking uncertainties and are subject to other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, those factors discussed in Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q, as such risks and uncertainties may be amended, supplemented or superseded from time to time by our subsequent periodic reports on Form 10-Q and Form 10-K we file with the United States Securities and Exchange Commission. We qualify all of our forward-looking

Financial Information

Part I. Financial Information

Condensed Consolidated Financial Statements

Item 1. Condensed Consolidated Financial Statements HeartFlow Holding, Inc. Condensed Consolidated Balance Sheets (in thousands, except share and per share amounts) (unaudited) June 30, December 31, 2025 2024 Assets Current assets: Cash and cash equivalents ........................................................................................... $ 80,210 $ 51,367 Accounts receivable, net ............................................................................................... 29,687 24,639 Restricted cash, current ................................................................................................ — 150 Prepaid expenses and other current assets .............................................................. 8,545 6,132 Total current assets .................................................................................................. 118,442 82,288 Property and equipment, net .............................................................................................. 8,070 8,920 Operating lease right-of-use assets .................................................................................. 17,894 18,805 Restricted cash, non-current .............................................................................................. 4,475 4,325 Other non-current assets .................................................................................................... 10,482 4,366 Total assets ................................................................................................................ $ 159,363 $ 118,704 Liabilities, redeemable convertible preferred stock and stockholders' deficit Current liabilities: Accounts payable ........................................................................................................... $ 1,786 $ 2,870 Accrued expenses and other current liabilities .....................................................

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