Vicarious Surgical 2025 Q3 Earnings Call - Focus on Achieving Design Freeze by Year-End 2026 and Reducing Cash Burn

Cameron, Moderator: Good afternoon. Thank you for attending the Vicarious Surgical 2025 third quarter earnings call. My name is Cameron, and I’ll be your moderator for today. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad, and I would now like to pass the conference over to your host, Marissa Beich, with the Gill Martin Group. You may proceed.

Marissa Beich, Investor Relations, Gill Martin Group: Great. Good afternoon. Today, after market close, Vicarious Surgical released financial results for the three months ended September 30, 2025. A copy of the press release is available on the company website. Before we begin, I’d like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements.

All forward-looking statements, including without limitation, those relating to obtaining approval for the Vicarious Surgical system and timing for any such approval, the timing of future clinical trials and FDA submissions, cash burn expectations, our operating trends and future financial performance, expense management, market opportunity, and commercialization are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the risk factors set forth in our Securities and Exchange Commission filings, including our most recent Form 10-K and Form 10-Q. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, November 12, 2025.

Vicarious Surgical disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. Now I’ll hand the call over to Stephen From, Chief Executive Officer, to begin prepared remarks. Stephen.

Stephen From, Chief Executive Officer, Vicarious Surgical: Thank you, Marissa, and good afternoon, everyone. It’s been a little over three months since I stepped into this role. We’ve moved from assessment to execution, and my focus has become clear: reach design freeze, extend our runway through meaningful burn reduction, and strengthen how we operate and communicate as a company. Our main priority remains achieving design freeze of the production equivalent system, the version that includes all features and specifications required for commercialization. We continue to target completion by year-end 2026. This milestone is the foundation for everything that follows, from clinical entry to eventual commercialization, and it drives how we sequence resources and decision-making across the company. The second area of focus is reducing burn.

We’ve acted quickly on feedback received through recent investor outreach in our October fundraise and launched a detailed exercise to identify the most effective ways to lower spending while maintaining our targeted design freeze timeline. That process has led us to evaluate targeted outsourcing opportunities and structural changes that can allow us to preserve engineering progress while improving capital efficiency. Since commencing this exercise, we have already restructured some of our internal teams and reduced headcount in certain functions. The framework is straightforward. We retain and invest in the areas that define and differentiate our technology, our robotic arms, camera systems, and core software, while evaluating outsourcing for elements that are less unique to us, such as portions of the capital equipment. This approach allows us to protect our core innovation while improving capital efficiency.

To support this effort, we’ve engaged a well-known consulting firm to perform a gap analysis and prepare recommendations and requests for proposals for outsourcing partners. That work is underway and expected to be completed by the end of November. The goal is to enter 2026 with a disciplined plan that meaningfully reduces burn while maintaining momentum toward design freeze. In October, we strengthened our balance sheet with approximately $5.9 million in gross proceeds from a registered direct offering. Those funds support the cost actions I just outlined and the work required to keep development on track. We’re also taking steps to improve our communication and transparency. Going forward, we will be sharing updates about the development of our platform, including our progress and the challenges that come with building a surgical robot, in the form of short posts and videos on our LinkedIn page and our investor relations website.

We will also introduce educational features on why certain steps, like controlled builds in our quality management system, matter. The goal is to give investors and partners a clear view of how innovation happens here, not just what we build, but how we build it. That is the posture we are carrying forward: disciplined on spend, focused on design freeze, and straightforward in how we communicate progress. With that, I’ll turn it over to our CFO, Sarah Romano, to walk you through the financials.

Sarah Romano, Chief Financial Officer, Vicarious Surgical: Thank you, Stephen. Total operating expenses for the third quarter 2025 were $11.5 million, which is a 35% decrease compared to $17.8 million in the third quarter of 2024. Research and development expenses for the third quarter 2025 were $8 million, compared to $10.8 million in the third quarter 2024. General and administrative expenses for the third quarter 2025 were $3.2 million, compared to $5.7 million in the third quarter 2024. Finally, third quarter 2025 sales and marketing expenses were $350,000, compared to $1.2 million in the third quarter of 2024. Our GAAP net loss for the third quarter 2025 was $11.1 million, or $1.86 per share. This compares to GAAP net loss of $17.1 million, or $2.90 per share in the third quarter of 2024.

Non-GAAP adjusted net loss for the third quarter of 2025 was $11.3 million, or adjusted net loss of $1.91 per share, compared to $17 million, or $2.87 per share in the third quarter of 2024. For reconciliation of all non-GAAP measures to GAAP, please review our earnings press release. We ended the third quarter 2025 with approximately $13.4 million of cash, cash equivalents, and short-term investments on our balance sheet. This represents a third quarter cash burn rate of approximately $10.5 million. Following the close of the third quarter 2025, we successfully completed a registered direct offering, adding approximately $5.2 million in net proceeds to our balance sheet. We continue to expect full year 2025 cash burn to be approximately $50 million, and we are actively focused on reducing our cash burn for 2026.

We are confident in driving a material reduction in cash burn going forward, and we are actively exploring further opportunities to bolster our balance sheet. We look forward to continuing to drive progress on our financial and technical goals in the coming quarters. With that, I will turn the call back to Stephen for closing remarks.

Stephen From, Chief Executive Officer, Vicarious Surgical: Thank you, Sarah. In closing, I remain dedicated to our commitment of transforming surgical care. As previously mentioned, tomorrow we will formally kick off our new communication effort with frequent informative updates regarding our progress toward design freeze. These will be available on our LinkedIn page. Transparency is central to how we intend to operate, documenting progress, acknowledging hurdles, and maintaining an honest dialogue about the process. These past few months since I began at Vicarious Surgical have been vital to the company’s future, and I plan on continuing my hard work in restructuring the business and regaining focus on our key milestones. I’d like to express my gratitude to our dedicated team, supportive investors, and valuable partners. Thank you all for your continued support and interest in Vicarious Surgical. Operator, we are now ready to take questions.

Cameron, Moderator: Thank you. We will now begin the Q&A session. If you would like to ask a question, please press star followed by one on your telephone keypad. If you’d like to remove your question, press star followed by two. Again, to ask a question, press star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question. During the Q&A session, we ask that you please limit your questions to one question and one follow-up. Again, please limit your questions to one question and one follow-up. The first question comes from the line of Josh Jennings with TD Cowen. You may proceed.

Josh Jennings, Analyst, TD Cowen: Hi, good afternoon. Thanks, Stephen and Sarah. I apologize. My audio went in and out, but I just wanted to confirm or correct that the timeline for system built to standard for regulatory testing and clinical use is still mid-2026, and just the progress that’s been made in terms of the first controlled build and then the faster build over the summer, that all that progress is still in play as you’re looking to outsource some of the components. I mean, can you just help us understand a little bit more detail that timeline and then how it is or is not impacted by this outsourcing initiative.

Stephen From, Chief Executive Officer, Vicarious Surgical: Yeah, so it’s a really good question. Definitely, we’re still doing everything we can to meet the timeline. We’re looking for design freeze to occur towards the end of 2026. Although there may be some disruption as we do the outsourcing, ultimately, we’re hoping that it doesn’t affect the timeline too much. Part of the communication plan is also to inform people, "Look, there’s going to be some disruption," and that’s just no way we can get around that. What I’d like to be able to do is when we see that there’s disruption, that we can communicate it in a timely manner so that you don’t get blindsided. You don’t have to wait every three months for a quarterly earnings call to be told something’s going on.

We’re trying to manage it in a really efficient manner so that we can mitigate any issues that may crop up with the outsourcing. It is still early days with the outsourcing. As I mentioned, we engaged a consulting firm. It is actually PA Consulting. We engaged their local office here in Boston to help us work through this plan. We are working through that diligently. That plan should be done by the end of this month.

Josh Jennings, Analyst, TD Cowen: Thanks for that. Maybe just to follow up, thinking about the most recent version, I believe, branded PREDV, should I be thinking that the construct, the design—I apologize for my non-engineering language and knowledge—but just the construct, the design, and the technology, the majority of the effort to date will hold through. This outsourcing initiative is not just a restart. It does not sound like that at all, but just to check that box and maybe any help thinking about the work to date and how that will contribute to the end product. It is just a matter of improving manufacturability, it sounds like, and also reducing costs at this outsourcing initiative. Thank you.

Stephen From, Chief Executive Officer, Vicarious Surgical: Yeah. Definitely trying to reduce the burn is important to us, but we also want to maintain that timeline as much as we can. Yes, it’s not like we stopped everything and we’re restarting builds. We’re always improving upon a build that we’ve done. When we did our first couple of builds using the control system or under control using the quality management system, we did refer to those as PREDV1 system. We’re using those systems, and we’re always upgrading them. At a certain point, though, you’ve done so many upgrades to that build that you want to do a new build under control. We’ll refer to that as PREDV2. The PREDV2, the idea is to complete that so that we have all the features that we want to be on that system as we approach for commercialization.

Our final product, before we go into regulatory V&V and into the clinic, that will be the product that we want to commercialize. That’s what we’re working towards right now. It’s implementing all of the features that we want to have for commercialization, and then we’re working at the specifications that we want them to be working at. That’s where the biggest issue comes in, is when you’re finally doing a build using your quality management system or under control, you don’t always have that luxury to push the boundaries as much as you’d like to, which you can do in an engineering build. You’re restricted or handcuffed to using the qualifications or requirements that exist under your quality management system. You don’t always reach the specifications that you were able to reach in your engineering build.

That is what we are working upon right now, is trying to get the full build done with all the features and at the specifications that we would like to be at, where we would have a system that we would take into the clinic and then into commercialization.

Josh Jennings, Analyst, TD Cowen: Okay. Thank you for those extra details. Okay.

Cameron, Moderator: The next question comes from the line of Ben Haner with Lake Street Capital Markets. You may proceed.

Ben Haner, Analyst, Lake Street Capital Markets: Good afternoon. Thanks for taking the question. Just wondering if you can provide any additional color on some of these development builds. Have you done sort of any cadaver labs, any sort of internal testing where you’ve had surgeons have hands-on with the kind of intermediate builds? How have those gone? Any color there would be much appreciated.

Stephen From, Chief Executive Officer, Vicarious Surgical: Yeah. Another good question, Ben. Thanks for that. As you know, or maybe not everybody knows this, we have our own OR here in our building. We have our own suite here. We use that. We utilize that to have surgeons come in and play around with our system and see where we’re at. We do have one of the founders who is also a surgeon, and he comes in and works with it frequently. There are also other surgeons that come. We just had a surgeon come up that’s naive to the system and use it for the first time because we’re always testing. Although we’re not at full feature at the specifications we want them to be, wherever we are with the build, we need to actually test it.

We need to have a surgeon come in and test it to see if it’s functioning properly, see if it’s stable, see if it’s reliable. All of those things, we want to see how we’re progressing. As we’re doing those tests, we’re also able to see what’s going wrong. Yes, we’re always bringing in surgeons. We’ve been actually very heavy on that over the last month. We’ve been doing different OR labs almost weekly now for the last month. A lot of the times, those are with synthetic cadavers, but a couple of weeks ago, we did do it with cadaver. It went really well. What we’ve been able to demonstrate, and you’re going to see this as we roll out the communication plan, is that we’re actually seeing an increase in the stability of the system with these surgeons using it.

We’ve been able to see a dramatic increase in time in doing the suturing for what would be known as an IPOM, ventral hernia. When they’re doing that suturing procedure, we’ve seen a dramatic drop in the time it takes to do that. That gets us really excited when we see that type of thing. Those are the type of things that, although it’s not the final system with all the features that the requirements needed, it is obviously a system that’s working, and we’re testing it. We’re always testing it. We’re always doing verification, and we’re always doing usability tests. That really helps us understand where we are with our build.

Ben Haner, Analyst, Lake Street Capital Markets: Got it. That’s helpful. I appreciate the anecdotal commentary on what you’ve seen in the suturing, and you’ve got that great example, I think, in the slide deck on the regression that you had in the camera and the ability to fix it. Are there any others like that that you’d like to share or maybe as previous to the timely communication plan?

Stephen From, Chief Executive Officer, Vicarious Surgical: Yeah, it’s kind of along the same line that I was just speaking about because when you do the suturing of the mesh with an IPOM ventral hernia, you suture up the hernia itself, and then you put a mesh around it, and you suture that up. What we’ve seen, I mentioned the dramatic drop in timing in order to complete that. It’s gone from, call it an average of 40 minutes down to an average of 14 minutes. It’s really dropped dramatically, which shows a huge improvement in the stability and reliability of the system. That’s a huge drop in time, which is really impressive and really exciting for the team.

Ben Haner, Analyst, Lake Street Capital Markets: That’s great. Thanks for taking the questions, and I look forward to tracking the real-time progress on LinkedIn and such.

Stephen From, Chief Executive Officer, Vicarious Surgical: All right. Thanks, Ben.

Cameron, Moderator: We also have two questions submitted by Ryan Zimmerman at BTIG. The first one is, how long do you anticipate the consulting engagement to take, and what is the cost? The second, what are you doing to solve the key issue of preserving cash while reaching design freeze at year-end 2026?

Stephen From, Chief Executive Officer, Vicarious Surgical: Yeah. Thanks for those questions, Ryan. PA Consulting was engaged a few weeks ago, and it’s a short engagement. It’s to go through this analysis with us for what makes the most sense to be outsourcing and how to approach the outsourcing. Although we already had a plan in place, we wanted to make sure we pressure-tested it with an outside consulting firm that does this for a living. We anticipate that being completed by the end of this month. They’re also going to be assisting us with putting the request for proposals in place. They know our system really well. We’ve used them in the past to help us with our capital equipment. It was easy for us to bring them on board because they know the teams, they know the people, they know the system really well.

They were able to complete this exercise pretty quickly for us. They did it at a really good cost. I’m not going to tell you exactly how much it was. It was a fixed fee, but it was really, really, they did a good job for us on pricing as well. That should be done by the end of the month. Our piece won’t be done by the end of the month, but those will be done as part of this process as well. We’ll reach out to different firms with the request for proposals to get quotes and decide who we want to go forward with. The idea is to have a lot of this in place by the end of Q1. Hopefully, that will help us really dramatically lower, at least materially lower, the budget for 2026 and definitely for 2027.

Where that’s going to end up, I don’t know yet because we’re still early stages in the outsourcing. As part of that, though, in trying to control the burn, we did do a small layoff a couple of weeks ago, spoke 15% of the employees, and that’s helping us also control the burn. We went through a very long exercise to understand how to approach that and who it was that we’d be laying off. It’s never easy to do one of those, but it’s something we felt we needed to do post that fundraise that we did a month ago.

Cameron, Moderator: Thank you. Ryan’s follow-up is, where do you stand with your hospital and health system partners through all of this?

Stephen From, Chief Executive Officer, Vicarious Surgical: Great. I mean, we still reach out, and they reach out to us. We have ongoing communications with them. The relationships are really strong. They want the same thing everybody else does. They want to be able to have the system in their hospital. We engage with the surgeons at these hospitals, and they definitely want to come over here and play with it, so we let them. It works for us as well because we get the feedback from them, and they get really excited. Like I said, we had a surgeon that’s never seen, other than seeing it on our website, never seen the system in person. He came here for the first time. We put him through simulation.

The same day he was here, never seen the system before, he was able to perform an IPOM surgery for the first time, and he was very excited. We have a really strong relationship with the healthcare and hospital systems, I should say. Thank you.

Cameron, Moderator: That will conclude the call. I would now like to pass the conference back to Stephen for closing remarks.

Stephen From, Chief Executive Officer, Vicarious Surgical: I would just like to thank everybody for participating and great questions. Hopefully, everybody, we launch the communication plan at 12:00 P.M. tomorrow on our LinkedIn site. If you would just refer to our LinkedIn as we go forward, you do not have to wait for another three months to hear from us. Thank you, everyone.

Cameron, Moderator: That concludes today’s call. Thank you for your participation, and enjoy the rest of your day.