Heartflow, Inc.

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations

Current wording

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the year ended December 31, 2025 included in our Annual Report on Form 10-K filed with the SEC on March 18, 2026. This discussion and analysis and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements based upon our current plans and expectations that involve risks, uncertainties and assumptions, such as statements regarding our plans, objectives, expectations, intentions and beliefs. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Part I, Item 1A, “Risk Factors”in our Annual Report on Form 10-K filed with the SEC on March 18, 2026. Please also see the section titled “Special Note Regarding Forward-looking Statements” in this Quarterly Report on Form 10-Q. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

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We have pioneered the use of software and artificial intelligence (“AI”) to deliver a more accurate and

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We provide software and artificial intelligence (“AI”) designed to deliver a more accurate and clinically effective non-invasive solution for diagnosing and managing coronary artery disease (“CAD”), a leading cause of death worldwide. As of March 31, 2026, our Heartflow Platform has been used to assess CAD in more than 650,000 patients, including 219,000 in 2025 alone. We believe that we are the most widely adopted AI-powered test for CAD. Our novel platform leverages AI and advanced computational fluid dynamics to create a personalized 3D model of a patient’s heart from a single coronary computed tomography angiography (“CCTA”), a specialized type of scan that provides detailed images of the heart’s arteries. Our Heartflow Platform delivers actionable insights on blood flow, stenosis, plaque volume and plaque composition thereby overcoming the limitations of traditional non-invasive imaging tests which rely on indirect measures of coronary disease and lead to higher false negative and false positive rates as demonstrated by our PRECISE trial. We believe the differentiated accuracy and clinical utility of our Heartflow Platform, along with its ability to enhance workflows, will continue to support our growth and advance the “CCTA + Heartflow” pathway as the definitive standard for the non-invasive diagnosis and management of CAD.

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under the Heartflow Platform that provide physicians with the critical insights needed to effectively

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To date, we have developed four software products under the Heartflow Platform that provide physicians with the critical insights needed to effectively diagnose and manage CAD:

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•Heartflow RoadMap Analysis offers a highly intuitive anatomic visualization of the coronary arteries,

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•Heartflow RoadMap Analysis offers a highly intuitive anatomic visualization of the coronary arteries, helping physicians quickly identify clinically relevant areas to focus their review. We provide Heartflow RoadMap Analysis to accounts as an integrated feature to enhance the efficiency of their CCTA program, and it is not a stand-alone product.

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•Heartflow FFRCT Analysis calculates blood flow and pinpoints clinically significant CAD, which is CAD

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•Heartflow FFRCT Analysis calculates blood flow and pinpoints clinically significant CAD, which is CAD with a fractional flow reserve (“FFR”) value of 0.80 or below, at every point in the major coronary arteries. FFR measures the severity of blood flow restriction in the coronary arteries on a scale of 1.0 (no restriction) to 0.0 (complete blockage) by assessing pressure differences across a stenosis during induced stress, guiding decisions on whether a patient requires invasive revascularization.

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•Heartflow Plaque Analysis provides a comprehensive assessment of coronary plaque, enabling

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•Heartflow Plaque Analysis provides a comprehensive assessment of coronary plaque, enabling optimized medical treatment strategies.

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clinical insights to optimize revascularization strategies, guide device selection, enhance procedural

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•Heartflow PCI Navigator, which we recently launched in April 2026, provides advanced visualization and clinical insights to optimize revascularization strategies, guide device selection, enhance procedural efficiency, and improve patient care. We provide Heartflow PCI Navigator to accounts as an integrated feature to enhance procedural efficiency, not as a stand-alone product.

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The Heartflow Platform has an existing commercial presence and regulatory approval in the United

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The Heartflow Platform has an existing commercial presence and regulatory approval in the United States, United Kingdom, European Union and Japan. Additionally, some or all of our platform has received medical device licensingor approvals in Canada, Australia, Israel, Saudi Arabia, United Arab Emirates and Bahrain. We have developed a highly scalable, capital efficient commercial model that combines Territory Sales Managers who drive new account adoption with Territory Account Managers who focus on increasing utilization by educating referring physicians. Our commercial team does not cover cases or otherwise spend time in an operating room or lab setting, which enables them to focus solely on driving commercial adoption and educational activities. We also have small, direct commercial teams in our international markets. In the future, we may expand our international presence beyond these markets.

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Our technology is simple and intuitive and does not require the purchase of any capital equipment. Our

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Our technology is simple and intuitive and does not require the purchase of any capital equipment. Our onboarding process seamlessly integrates the Heartflow Platform into the customer’s daily workflow. These unique attributes of our business model afford our commercial organization a differentiated level of efficiency and scalability.

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We have experienced considerable revenue growth since we began commercializing the Heartflow

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We have experienced considerable revenue growth since we began commercializing the Heartflow Platform in 2015, driven primarily by growth in our account base and increasing test volumes at accounts in our installed base. For the three months ended March 31, 2026 and 2025, we recognized revenue of $52.6 million and $37.2 million, respectively. Substantially all of our revenue is generated on a “pay-per-click” basis each time a physician chooses to review either our Heartflow FFRCT Analysis, Heartflow Plaque Analysis, or both, and we recognize usage-driven fee revenue upon delivery of the requested analysis to the physician. Heartflow FFRCT Analysis has served as our commercial foundation, representing 98% of our total cumulative revenue as of March 31, 2026. In the second half of 2023, we initiated limited market education efforts for Heartflow Plaque Analysis, our second commercial product, and we expect to broaden our market education efforts as payor coverage for Heartflow Plaque Analysis increases. Heartflow Plaque Analysis is currently covered byfive of the seven MACs with the remaining MACs providing coverage on a case-by-case basis and by a majority of commercial payors. Our Heartflow RoadMap Analysis is generally provided as a workflow efficiency tool to drive customer retention and loyalty and is not a stand-alone product.

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Prior to our initial public offering (“IPO”), we primarily funded our operations with proceeds from sales of

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Prior to our initial public offering (“IPO”), we primarily funded our operations with proceeds from sales of shares of our redeemable convertible preferred stock, common stock and convertible promissory notes, borrowings under our term loans and revenue received from our customers. As of March 31, 2026, we had $254.9 million in cash, cash equivalents and investments.

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On August 11, 2025, we completed our IPO, in which we issued and sold 19,166,667 shares of our

Current wording

On August 11, 2025, we completed our IPO, in which we issued and sold 19,166,667 shares of our common stock, which includes an additional 2,500,000 shares of common stock purchased by the underwriters pursuant to their option to purchase additional shares, at a price to the public of $19.00 per share. The cash proceeds from our IPO were approximately $332.4 million, net of underwriting discounts and commissions and offering costs of $31.8 million.

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We have incurred significant operating losses and negative cash flows since our inception, and we expect

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We have incurred significant operating losses and negative cash flows since our inception, and we expect to continue to incur losses as we grow and transition to now operating as a public company. Our net loss for the three months ended March 31, 2026 and 2025 was $27.4 million and $32.3 million, respectively.

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We believe there are several important factors that have impacted and that we expect will continue to

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We believe there are several important factors that have impacted and that we expect will continue to impact our operating performance and results of operations for the foreseeable future. These factors include, among others:

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•Rate of adoption of CCTA in the market and our ability to increase adoption of the CCTA+ Heartflow

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•Rate of adoption of CCTA in the market and our ability to increase adoption of the CCTA+ Heartflow pathway among both referring and reading physicians.

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•Ability to successfully introduce our Heartflow Plaque Analysis and other new products and the rate at

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•Ability to successfully introduce our Heartflow Plaque Analysis and other new products and the rate at which they are adopted by physicians.

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•Ability to automate an increasing number of the manual components of our production process and

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•Ability to automate an increasing number of the manual components of our production process and the rate at which we hire and train analysts to full productivity.

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•Seasonality we experience throughout the year, including due to staff availability, vacations, weather

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•Seasonality we experience throughout the year, including due to staff availability, vacations, weather and other macro economic events.

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We regularly review a number of operating and financial metrics to evaluate our business, measure our

Current wording

We regularly review a number of operating and financial metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate our business plan and make strategic decisions. Substantially all of our revenue is generated on a “pay-per-click” basis each time a physician chooses to review either our Heartflow FFRCT Analysis, Heartflow Plaque Analysis, or both, and we recognize usage-driven fee revenue upon delivery of the requested analysis to the physician. We define a “Heartflow revenue case” as each time an account orders and we deliver the requested analysis to the physician. For example, the ordering of both a Heartflow FFRCT Analysis and a Heartflow Plaque Analysis from a single CCTA counts as two revenue cases. We define an “account” as any individual facility that orders a Heartflow FFRCT Analysis, Heartflow Plaque Analysis, or both. Accounts may have more than one reading physician or CT machine. The following table lists these revenue cases in each of the three month periods as indicated:

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The period-to-period change in Heartflow revenue cases is an indicator of our ability to drive adoption and

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The period-to-period change in Heartflow revenue cases is an indicator of our ability to drive adoption and generate sales revenue and is helpful in tracking the progress of our business. We believe that Heartflow revenue cases are representative of our current business; however, we anticipate this metric may be substituted for additional or different metrics as our business grows.

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Substantially all of our revenue comprises usage-driven fees from accounts whoorder either our

Current wording

Substantially all of our revenue comprises usage-driven fees from accounts who order either our Heartflow FFRCT Analysis or our Heartflow Plaque Analysis, or both. We recognize usage-driven fee revenue upon delivery of the requested analysis to the physician. Key factors that drive our revenue include revenue case growth from our installed base and the success of our sales force in expanding adoption of the Heartflow Platform to new accounts and expanding the utilization of our system by accounts in our installed base. We consider an account that has our Heartflow solution deployed with the ability to send us CCTA images for processing as being part of our installed base. New accounts generally take 12 months to reach steady state revenue case volumes. New accounts typically ramp to FFRCT utilization close to full patient applicability in the first year and remain at this level consistently. Our Heartflow FFRCT Analysis is indicated for patients with stenosis levels between 40% and 90%, and we believe approximately 33% of patients have this level of stenosis. Revenue cases generated from clinic or office-based accounts typically carry a lower pricing than hospital-based accounts. We expect the percentage of our revenue cases generated from clinic or office-based accounts to continue to increase over time. The percentage of our U.S. revenue cases attributable to office and clinic-based accounts was 36% and 30% for the three months ended March 31, 2026 and 2025, respectively.

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While a single customer may include multiple accounts, no single customer accounted for 10% or more of

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While a single customer may include multiple accounts, no single customer accounted for 10% or more of our revenue during the three months ended March 31, 2026 and 2025. However, the decision-making function for some of these accounts is concentrated in a relatively small number of customers, such that the loss of one customer could result in a disproportionate loss across our accounts. As we expand the adoption of the Heartflow Platform, we expect a majority of new accounts to come from new customers, decreasing our customer concentration risk.

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Our revenue has fluctuated, and we expect it to continue to fluctuate from quarter-to-quarter due to a

Current wording

Our revenue has fluctuated, and we expect it to continue to fluctuate from quarter-to-quarter due to a variety of factors, including the number of accounts in our installed base, the volume of Heartflow Platform usage by accounts in our installed base, customer pricing contracts that include utilization and volume rebates, changes in the mix of customer accounts and seasonality. We may experience fluctuations in the volume of Heartflow Platform usage by our customers based on seasonal factors that impact the number of radiologists and support staff available to conduct CCTAs at customer accounts.

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Cost of revenue consists of personnel and related expenses, including stock-based compensation costs,

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Cost of revenue consists of personnel and related expenses, including stock-based compensation costs, primarily related to our production team. Additional costs include third-party hosting fees, amortization of capitalized internal-use software, amortization of contract fulfillment costs as well as royalties associated with technology licenses used in connection with the delivery of our product and allocated overhead, which includes facilities expenses, equipment, depreciation and technology services. These costs are partially offset by capitalized contract fulfillment costs. The role of the production team is to support our patient case volume revenue by performing defined quality-related activities on CCTA scans submitted by our customers for analysis. The portion of these costs that supports patient case volume revenue is recorded as cost of revenue. The production team also supports activities in our clinical trials and research and development, which are allocated as research and development expense. We expect cost of revenue to increase as we hire additional personnel in our production team to support our increasing patient case volume.

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We calculate gross margin as gross profit divided by revenue. Our gross margin has been and will

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We calculate gross margin as gross profit divided by revenue. Our gross margin has been and will continue to be affected by a variety of factors, primarily by our production team costs, the timing of hiring new production team members and training them to full productivity, the timing of our acquisition of new customers and the related capitalization of contract fulfillment costs, and the pricing and commercialization of Heartflow Plaque Analysis and other new products. Although, we expect our gross margin to fluctuate from period to period, based upon the factors described above, we believe our gross margin will increase over the long term as we leverage the AI-based nature of our software platform to automate an increasing number of the manual components of our production team’s process, thereby lowering the cost of revenue per analysis. We also expect increased revenues from our Heartflow Plaque Analysis to positively impact our gross margin, as it runs on the same CCTA scan as Heartflow FFRCT Analysis. In the short term, we expect modulations in our gross margin as we hire and train additional personnel in our production team to support our increasing patient case volume. These expenses are offset by the varying levels of support provided by the production team in our clinical trials and research and development, which are allocated as research and development expense, and the capitalization of contract fulfillment costs.

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Research and development expenses are incurred in connection with the advancement of the Heartflow

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Research and development expenses are incurred in connection with the advancement of the Heartflow Platform with the goal to introduce products, features and improvements aimed at increasing the value proposition for our customers by expanding its applicability to additional disease states and patient populations. Research and development expenses consist primarily of engineering, product development, consulting services, clinical studies to develop and support our products, regulatory activities, medical affairs, and other costs associated with products and technologies that are in development. Research and development expenses consist of personnel and related expenses, including stock-based compensation costs, clinical trials, third-party consulting costs, the portion of the costs incurred by our production team to support clinical trials and research and development efforts, and allocated overhead, including facilities expenses, equipment and depreciation. Our research and development team is comprised of PhD research scientists with expertise in AI-based algorithms and medical imaging, alongside software engineers skilled in cloud architecture, AI algorithms, machine and deep learning and 3D visualization, as well as product managers and designers who ensure optimal customer experience and design. We record research and development expenses in the periods in which they are incurred. We expect our research and development expenses to increase as we conduct clinical studies for expanded indications for useor to expand the addressable market populations for our productsand to hire additional personnel to develop new product offerings and product enhancements. For example, in the second half of 2026, we expect to begin enrollment in three randomized clinical trials focused on high-risk asymptomatic sub populations to expand the addressable market for our products.

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Selling, general and administrative expenses consist of personnel and related expenses, including stock-

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Selling, general and administrative expenses consist of personnel and related expenses, including stock-based compensation costs, related to selling and marketing, commercial operations, reimbursement, finance, legal, information technology and human resources functions. Other expenses include sales commission, marketing initiatives, professional service fees (including legal, audit, accounting and tax fees), market access work to secure reimbursement for our technologies, travel expenses, conferences and trade shows, and allocated overhead, which includes facilities expenses, software licenses, depreciation and other miscellaneous expenses.

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We expect that our selling, general and administrative expenses will increase in the future as a result of

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We expect that our selling, general and administrative expenses will increase in the future as a result of expanding our operations, including hiring personnel, to both drive and support anticipated growth as well as various incremental costs associated with operating as a public company. We expect that our costs will increase related to legal, audit, accounting fees, consulting fees, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance costs, investor and public relations costs and other expenses that we did not incur as a private company. However, we expect selling, general and administrative expenses to decrease as a percentage of revenue primarily as, and to the extent that, our revenue grows.

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Interest expense, net consisted primarily of interest expense on our 2024 Term Loan and related

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Interest income (expense), net consists primarily of interest income earned on our cash, cash equivalents and investments, offset by interest expense on our 2024 Term Loan and related amortization of debt discount and debt issuance costs prior to its full repayment in August 2025.

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Other income (expense), net consists primarily of changes in fair value related to our common stock

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Other expense, net consists primarily of changes in fair value related to our common stock warrant and derivative liability, as well as foreign exchange transaction gains or losses from transactions and asset and liability balances denominated in currencies other than the U.S. dollar. We continued to record adjustments to the estimated fair value of the common stock warrant liability until the warrants were exercised, and we continued to record adjustments to the estimated fair value of the derivative liability until their conversion upon our IPO. All of our common stock warrants were net exercised in October 2025.

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Provision for income taxes consists of income tax expense in foreign jurisdictions. To date, we have not

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Provision for income taxes consists of income tax expense in foreign jurisdictions. To date, we have not recorded any U.S. federal or state income tax expense. In the United States, we have recorded deferred tax assets for which we provide a full valuation allowance. Due to our history of net operating losses since inception, we expect to maintain a full U.S. valuation allowance in the foreseeable future due to uncertainties regarding our ability to realize these assets.

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The following table summarizes our results of operations for the three months ended September 30, 2025

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The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025:

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revenue was primarily attributable toa 48% increase in revenue case volume, partially offset by a

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Revenue increased $15.4 million, or 41%, to $52.6 million during the three months ended March 31, 2026, compared to $37.2 million during the three months ended March 31, 2025. The increase in revenue was primarily attributable to a 67% increase in revenue case volume, partially offset by a reduction in average sales price due to a higher percentage of revenue cases generated from clinic and office-based accounts and an increase in volume rebates.

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million in third-party hosting fees, $0.2 million in royalties, and $0.1 million in computer hardware

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Cost of revenue increased $1.1 million, or 13%, to $10.4 million during the three months ended March 31, 2026, compared to $9.3 million during the three months ended March 31, 2025. This increase was attributable to an increase of $2.0 million in personnel and related expenses, $0.3 million in third-party hosting fees, $0.2 million in royalties, and $0.1 million in computer hardware expenses, partially offset by a net increase of $1.5 million in capitalized and amortized contract fulfillment costs. Personnel and related expenses included $0.1 million of stock-based compensation costs during each of the three months ended March 31, 2026 and 2025. Gross margin for the three months ended March 31, 2026 increased to 80% as compared to 75% for the three months ended March 31, 2025. The gross margin increase during the three months ended March 31, 2026 was primarily attributable to our increase in revenue case volume and improved production team productivity driven by AI efficiency initiatives, partially offset by our continued investment in the hiring and training of additional personnel in our production team to support our increasing revenue case volume. Although we expect to continue to invest in the hiring and training of additional personnel in our production team, we expect our gross margin will continue to increase over the long term.

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30, 2024. The increase in research and development expenses was primarily attributable to an increase

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Research and development expenses increased $7.7 million, or 55%, to $21.6 million during the three months ended March 31, 2026, compared to $13.9 million during the three months ended March 31, 2025. The increase in research and development expenses was primarily attributable to an increase of $6.1 million in personnel and related expenses directly associated with an increase in headcount, $0.8 million in consulting and professional fees, $0.3 million in allocated overhead, $0.2 million in allocated production team costs to support clinical trials and research and development efforts, $0.2 million in software-related costs and $0.2 million in third-party hosting fees, partially offset by a decrease of $0.2 million in clinical trial expenses and a net increase of$0.2 million of capitalized internal-use software costs. Personnel and related expenses included $2.1 million and $0.5 million of stock-based compensation costs during the three months ended March 31, 2026 and 2025, respectively.

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third-party hosting fees and $0.1 million in allocated overhead. Personnel and related expenses included

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Selling, general and administrative expenses increased $11.1 million, or 35%, to $42.6 million during the three months ended March 31, 2026, compared to $31.5 million during the three months ended March 31, 2025. The increase in selling, general and administrative expenses was primarily attributable to an increase of $8.4 million in personnel and related expenses directly associated with an increase in headcount, $0.7 million in professional fees, including legal, audit and consulting fees, $0.7 million in computer hardware and software-related costs, $0.7 million in travel expenses and $0.4 million in advertising and other promotional expenses, partially offset by a decrease of $0.4 million in allocated overhead. Personnel and related expenses included $4.3 million and $1.9 million of stock-based compensation costs for the three months ended March 31, 2026 and 2025, respectively.

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30, 2024. This decreased expense was mainly attributable to the repayment in full of our 2024 Term Loan

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Interest income (expense), net increased to income of $2.5 million during the three months ended March 31, 2026, compared to an expense of $4.6 million during the three months ended March 31, 2025. This change was mainly attributable to the repayment in full of our 2024 Term Loan in August 2025 and the conversion of our 2025 Convertible Notes to common stock upon our IPO in August 2025.

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Interest expense, net decreased to an expense of $1.7 million during the three months ended

Current wording

Other expense, net decreased to an expense of $0.3 million during the three months ended March 31, 2026, compared to an expense of $10.3 million during the three months ended March 31, 2025. The three months ended March 31, 2025 included a $1.6 million charge from the remeasurement and recognition of the change in fair value related to our common stock warrant liability and a $9.0 million charge from the remeasurement and recognition of the change in fair value related to our derivative liability.

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Provision for income taxes was $30,000 for the three months ended September 30, 2025, compared to $0

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Provision for income taxes was $23,000 for the three months ended March 31, 2026, compared to $0 for the three months ended March 31, 2025, which was related to our foreign taxes.

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September 30, 2025, we had an accumulated deficit of $1.1 billion.

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As of March 31, 2026, we had $254.9 million in cash, cash equivalents and investments and an accumulated deficit of $1.1 billion. Prior to our IPO, we primarily funded our operations with proceeds from sales of shares of our redeemable convertible preferred stock, common stock and convertible promissory notes, borrowings under our term loans and revenue received from our customers, which we expect to continue to be our primary source of future liquidity.