Executive Summary / Key Takeaways

• Transformative Technology at an Inflection Point: Hyperfine is poised for accelerated growth, driven by its next-generation AI-powered Swoop Portable MR Imaging System and Optive AI software, which deliver significantly enhanced image quality approaching conventional 1.5 Tesla MRI, enabling broader clinical utility and faster adoption.
• Strategic Market Diversification: The company is strategically expanding beyond its traditional U.S. hospital critical care focus into high-potential neurology office settings (enabled by new IAC accreditation and CMS eligibility) and rapidly growing international markets, creating multiple, less variable revenue streams.
• Strong Second-Half 2025 Outlook: Management projects full-year 2025 revenue growth of 10% to 20% over 2024, with a significant sequential step-up in the second half, fueled by new product launches, market expansion, and an increased average selling price for its next-generation system.
• Improving Financial Profile: Despite historical losses, Hyperfine is demonstrating disciplined expense management, achieving sequential gross margin expansion (49.3% in Q2 2025) and a 19% sequential reduction in cash burn (excluding financing) in Q2 2025, extending its cash runway to the end of 2026.
• Competitive Moat and Execution: As a first mover in AI-powered portable ultra-low-field MRI, Hyperfine leverages its proprietary technology and clinical evidence to address critical unmet needs in accessibility and affordability, positioning it uniquely against larger, traditional MRI players.

The Unmet Need: Redefining Brain Imaging Accessibility

Hyperfine, Inc. (NASDAQ:HYPR) stands at the forefront of a medical imaging revolution, addressing a critical global challenge: the pervasive lack of accessible and affordable brain MRI. Its flagship product, the Swoop Portable MR Imaging System, is an AI-powered, ultra-low-field (ULF) magnetic resonance device designed to bring high-quality brain imaging directly to the patient's bedside or point of care, circumventing the immense infrastructure and cost barriers of conventional MRI. This mission is particularly pertinent given the increasing demand for MR imaging, driven by an aging population, rising prevalence of neurological conditions, and a global trend towards decentralized healthcare.

The market opportunity for Hyperfine is substantial. In the United States alone, the total addressable market for Swoop system device placements in hospital and office settings is estimated to exceed $6 billion. Globally, over three billion people are affected by brain diseases, yet 90% of the world's population lacks timely diagnostic imaging due underserviced areas and the high cost and complexity of traditional MRI systems. Hyperfine's strategy directly targets this gap, positioning itself as a disruptive force in a market dominated by established giants like Siemens Healthineers (SHL), GE Healthcare (GEHC), Philips Healthcare (PHG), and Canon Medical Systems (CAJ). While these incumbents possess vast resources and broad portfolios of advanced imaging modalities, their offerings are primarily large, fixed, high-field MRI scanners requiring specialized facilities and personnel. Hyperfine differentiates itself by prioritizing portability, affordability, and ease of use, carving out a unique niche in point-of-care diagnostics.

A Decade of Innovation: The Swoop System's Technological Edge

Hyperfine's journey began in 2014, culminating in the initial FDA 510k clearance for the Swoop system in 2020, which created an entirely new category of portable MRI. This foundational technology has been continuously refined through a relentless focus on innovation. The company's commitment to technological leadership is evident in its rapid software development cycle, with ten generations of AI-powered software released since its inception.

The latest advancements are particularly transformative. In July 2024, the ninth-generation AI-powered software received FDA clearance, significantly reducing scan times across multiple MR sequences without compromising image quality. This was followed by CE Mark and UKCA Mark approvals in October 2024 and February 2025, respectively, paving the way for broader international adoption. A pivotal milestone occurred in May 2025 with the FDA clearance of the tenth-generation AI-powered Optive AI™ software and the new next-generation Swoop system hardware. This new system, incorporating five years of real-world experience, features innovations specifically engineered to deliver the highest signal-to-noise ratio. When paired with Optive AI, it achieves exceptional image quality for low-field MRI, including improved resolution, uniformity, and faster acquisition times. Management has noted that the images from these next-generation systems "approach that of conventional 1.5 Tesla MRI scanners," a critical validation of Hyperfine's technological prowess.

The "so what" for investors is profound. This technological leap significantly strengthens Hyperfine's competitive moat. The ability to deliver near-conventional MRI image quality in a portable, affordable, and easy-to-use package directly addresses the bottlenecks of traditional imaging. For instance, a study presented at the European Society of Neuroradiology demonstrated the Swoop system's median time to scan for stroke patients was 2.5 hours, dramatically faster than the 27.7 hours for conventional MRI, while offering comparable diagnostic performance to head CT and high specificity. Furthermore, the low magnetic field strength of the Swoop system offers an increased safety profile, being favorable for patients with neuro implants, pacemakers, or even dental braces, which can cause significant interference with high-field magnets. This differentiation allows Hyperfine to command a premium, with the new Swoop system carrying an MSRP of $550,000, representing a 15% premium over its prior version. The company's partnership with NVIDIA (NVDA), announced in March 2025, further underscores its commitment to advancing AI-powered image reconstruction and real-time clinical decision support, aiming to make brain MRIs quicker, more intelligent, and more affordable worldwide.

Diversifying the Growth Vectors: Hospitals, Offices, and Global Reach

Hyperfine's strategy for growth is built on a three-pronged approach: deepening penetration in U.S. hospitals, launching into the U.S. neurology office setting, and expanding its international footprint. This diversification is crucial for mitigating the historical variability and protracted sales cycles experienced in the U.S. hospital market, which can often stretch to 1-1.5 years.

In U.S. hospitals, Hyperfine is expanding its focus beyond critical care into emergency departments and hospital-based neurology clinics. The PRIME study at Yale School of Medicine is evaluating the potential of AI-powered portable MRI for triage in emergency settings, where timely imaging is paramount. Commercial execution involves engaging radiologists, clinical stakeholders, and administrators, highlighting both clinical benefits and compelling economic value. Data from key Swoop system accounts, such as Missouri Baptist, document incremental conventional MRI scans enabled by Swoop in critical care and cost savings through faster decision-making and patient discharge. The company is also actively engaging with Integrated Delivery Networks (IDNs) for enterprise-wide programs, indicating a shift towards larger, more strategic partnerships.

The U.S. neurology office setting represents a particularly compelling greenfield opportunity. Neurologists in the U.S. directly impact 100 million patient lives and order an average of 500 to 600 MRIs annually, yet only a small fraction of private practices have on-site MRI equipment. This market became significantly more accessible in late 2024 when the Intersocietal Accreditation Commission (IAC), a CMS-approved body, updated its MRI standards to include portable ultra-low-field brain MRI, making Swoop system exams eligible for CMS reimbursement. Hyperfine completed its office pilot program in Q2 2025, with pilot sites successfully achieving IAC accreditation, initiating scanning, and navigating the reimbursement process. The Neuro PMR study, assessing diverse use cases in neurology offices, has enrolled 100 patients "significantly ahead of expectations," demonstrating strong enthusiasm. The company is now in the launch phase, with a trained sales team and a partnership with NeuroNet to promote the Swoop system to neurology practices.

Internationally, Hyperfine is executing a global expansion strategy to broaden access to MR brain imaging in regions with large populations and low MRI penetration. Optive AI software is now available in Canada, Australia, and New Zealand, with a European launch expected by the end of 2025. Regulatory approval in India is anticipated by the end of 2025, opening another significant market. While the next-generation Swoop system hardware is expected internationally by the end of 2026, the immediate availability of Optive AI software provides a substantial image quality upgrade to existing and new international users. The company exited 2024 with 13 distributors across European, Middle Eastern, and Asian geographies, focusing on "going deeper" in select markets and establishing centers of excellence.

Financial Performance: Investing in an Inflection Point

Hyperfine's financial performance in the first half of 2025 reflects a period of strategic investment and transition, with management actively steering towards a significant inflection point. For the second quarter of 2025, total sales reached $2.7 million, marking a 26% sequential increase from Q1 2025, driven by the sale of 8 units, including the first next-generation Swoop system. This sequential growth is a positive sign, especially after a challenging first quarter where revenue of $2.1 million was impacted by the loss of several grant-funded deals at academic institutions, a risk management has since addressed by not relying on such funding for its forward-looking pipeline.

Year-to-date for the six months ended June 30, 2025, total sales were $4.83 million, a decrease of 30.2% compared to $6.93 million in the prior year period, primarily due to a reduction in units sold (14 units YTD Q2 2025 vs. 26 units YTD Q2 2024). However, this was partially offset by an increase in the average selling price of devices, particularly with the introduction of the higher-priced next-generation system.

Gross margin for Q2 2025 expanded significantly to 49.3%, an 800 basis point sequential increase from Q1 2025's 41.3%, driven by a more favorable sales mix and the higher average selling price. This compares favorably to the full-year 2024 gross margin of 46%, demonstrating improving product economics.

Operating expenses reflect a disciplined approach to capital preservation. Research and development (R&D) expenses decreased to $4.5 million in Q2 2025 from $5.9 million in Q2 2024, primarily due to lower headcount and consulting expenses, signaling the company's transition to a commercial growth stage. Sales, general, and administrative (SG&A) expenses also saw a sequential decrease to $6.4 million in Q2 2025 from $6.7 million in Q1 2025. Despite these efficiencies, Hyperfine reported a net loss of $9.2 million in Q2 2025, contributing to an accumulated deficit of $313.1 million as of June 30, 2025, underscoring the ongoing investment phase.

Liquidity remains a key focus. The company held $25.4 million in cash and cash equivalents as of June 30, 2025. Net cash burn, excluding financing activities, decreased by 19% sequentially to $8.1 million in Q2 2025. A $6 million registered direct offering in February 2025, coupled with proceeds from an at-the-market (ATM) equity program, bolstered the balance sheet. Management projects a cash runway to the end of 2026, supported by existing cash and anticipated sales, while acknowledging that future cash requirements will depend on market adoption, R&D, and commercial expansion costs.

Outlook and Risks: Charting the Path to Commercial Scale

Hyperfine's management maintains an optimistic outlook for the full year 2025, projecting revenue growth in the range of 10% to 20% over 2024. This guidance implies a "significant revenue step-up" in the second half of 2025, with a sequential increase in Q3 expected to be 50% greater than the Q1 to Q2 improvement, and an even more substantial step-up anticipated in Q4 and beyond. This acceleration is predicated on the successful commercialization of the next-generation Swoop system and Optive AI software, the full launch into the U.S. neurology office setting, expanded hospital site-of-care penetration, and continued international traction, including anticipated regulatory approval in India by year-end.

Gross margin for the full year 2025 is expected to be between 47% and 50%, representing a 280 basis point increase at the midpoint over 2024. Management is confident in surpassing 50% gross margins sustainably as higher sales volume materializes from these growth catalysts. Total cash burn for 2025 is projected to be in the range of $27 million to $29 million, a 27% decline year-over-year at the midpoint, reflecting a strategic allocation of resources to growth initiatives while maintaining spending discipline.

Despite the compelling growth narrative, investors must consider several risks. The company's history of losses and negative working capital raises a "going concern" flag, dependent on future financing and revenue growth. Protracted hospital sales cycles remain a challenge, potentially delaying revenue recognition. While the company has diversified its funding sources, reliance on a single-source manufacturer and suppliers for its products poses operational risks. Furthermore, while currently not materially impacted, changes in international trade policies, including tariffs, could increase costs or hinder global expansion. Hyperfine also faces intense competition from larger, more financially resourced medical imaging companies. While its portable, AI-powered ULF MRI offers a unique value proposition, these competitors are also investing heavily in AI and digital health, necessitating continuous innovation and strong execution from Hyperfine to maintain its competitive edge.

Conclusion

Hyperfine, Inc. is at a pivotal juncture, transitioning from an innovative developer to a commercial-stage company with a clear vision for accessible brain imaging. The launch of its next-generation Swoop system and Optive AI software marks a significant technological leap, offering image quality that rivals conventional MRI in a portable, cost-effective package. This technological leadership, coupled with a strategic diversification into high-growth neurology office and international markets, positions Hyperfine for substantial revenue acceleration in the latter half of 2025 and beyond.

While the company continues to operate at a loss, its improving gross margins, disciplined expense management, and bolstered liquidity demonstrate a clear path towards financial sustainability. The 'so what' for investors lies in Hyperfine's ability to execute on its multi-faceted growth strategy, leveraging its proprietary AI-powered technology to capture market share in underserved segments. Should Hyperfine successfully navigate the complexities of commercial scale-up and competitive dynamics, its unique value proposition could unlock significant long-term value in the rapidly evolving landscape of global healthcare.