iCAD, Inc. reported its financial results for the three and nine months ended September 30, 2024, showing a modest increase in revenue and a continued focus on its core cancer detection business following the sale of its Xoft business line on October 23, 2023.

For the third quarter of 2024, iCAD generated revenue of $4.2 million, a 3.5% increase from $4.1 million in the same period of 2023. The growth was primarily driven by a 14.1% rise in product revenue, which reached $2.5 million, up from $2.2 million. However, service revenue declined by 8.9% to $1.7 million. For the nine months ended September 30, 2024, total revenue was $14.2 million, reflecting a 12.9% increase from $12.6 million in the prior year. Product revenue for this period increased by 27.3% to $8.9 million, while service revenue decreased by 5.0% to $5.3 million.

Gross profit for the third quarter was $3.6 million, maintaining a gross margin of 86%, consistent with the previous year. For the nine-month period, gross profit rose to $12.0 million, representing 84% of revenue, compared to 83% in 2023.

Despite the revenue growth, iCAD reported a loss from operations of $2.0 million for the third quarter, compared to a loss of $1.2 million in the same period last year. The nine-month loss from operations improved to $5.4 million from $7.0 million in 2023. The net loss for the third quarter was $1.8 million, compared to $1.4 million in the prior year, while the nine-month net loss decreased to $4.8 million from $6.9 million.

Operating expenses for the third quarter increased by 19.2% to $5.6 million, driven by higher engineering and product development costs, which rose by 67.9% to $1.9 million. Marketing and sales expenses also increased by 24.5% to $1.9 million. However, general and administrative expenses decreased by 11.6% to $1.8 million.

As of September 30, 2024, iCAD had cash and cash equivalents of $18.8 million, down from $21.7 million at the end of 2023. The company continues to face challenges from the ongoing impacts of the COVID-19 pandemic and geopolitical uncertainties, which may affect future performance.

In terms of strategic developments, iCAD completed the sale of its Xoft business, which is now reported as a discontinued operation. The transaction provided approximately $5 million in cash, with an additional $0.7 million held in escrow. The company has also committed to a restructuring plan that included a workforce reduction of about 28% in March 2023, incurring charges of $0.2 million related to this restructuring.

Overall, iCAD's focus remains on its AI-powered cancer detection solutions, particularly the ProFound Breast Health Suite, which has seen increased usage globally.