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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________

FORM 10-Q

_________________________

(Mark One)


x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025


o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission File Number: 001-42790

_________________________

Heartflow, Inc.

(Exact Name of Registrant as Specified in its Charter)

_________________________


Delaware			26-0506743
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

331 E. Evelyn Avenue
Mountain View, California			94041
(Address of Principal Executive Offices)			(Zip Code)

Registrant’s telephone number, including area code: (650) 241-1221

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	HTFL	The Nasdaq Stock Market LLC (Nasdaq Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),

and (2) has been subject to such filing requirements for the past 90 days.Yes o No x

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted

pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the

registrant was required to submit such files).Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller

reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller

reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	o	Accelerated filer	o

Non-accelerated filer	x	Smaller reporting company	o

		Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for

complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

As of August 31, 2025, the number of outstanding shares of the registrant’s common stock, par value $0.001 per share, was

83,396,102.

Table of Contents


		Page

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 Operations	40

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	52

Item 4.	Controls and Procedures	53

Part II: Other Information		54

Item 1.	Legal Proceedings	54

Item 1A.	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	106

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

statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our

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,”

“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,

statements regarding our future results of operations and financial positions, plans for our current and future

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

statements will be achieved or occur at all. Forward-looking statements involve known and unknown risks and

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

statements by these cautionary statements. Moreover, we operate in a very competitive and rapidly changing

environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks

and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report

on Form 10-Q.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date

on which the statements are made. We undertake no obligation to update any forward-looking statements made

in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on

Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We

may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and

you should not place undue reliance on our forward-looking statements.

Table of Contents

Part I. Financial Information

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 ..........................................................	25,664	25,319
Operating lease liabilities, current ................................................................................	5,492	5,416
Total current liabilities ..............................................................................................	32,942	33,605
Convertible notes ..................................................................................................................	68,336	—
Term loan ...............................................................................................................................	114,087	136,431
Common stock warrant liability ..........................................................................................	23,304	20,835
Derivative liability ..................................................................................................................	29,407	—
Operating lease liabilities, non-current ............................................................................	17,235	18,537
Other non-current liabilities .................................................................................................	281	214
Total liabilities ............................................................................................................	285,592	209,622
Commitments and contingencies (Note 7)
Redeemable convertible preferred stock issuable in series, $0.001 par value; 122,231,454 shares authorized, issued and outstanding as of June 30, 2025 and December 31, 2024; aggregate liquidation value of $951,917 as of June 30, 2025 and December 31, 2024 ......................................................................................................	768,566	768,566
Stockholders’ deficit:
Common stock, $0.001 par value; 210,300,000 shares authorized as of June 30, 2025 and December 31, 2024; 6,389,444 and 6,122,048 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively .....................	6	6
Additional paid-in capital .....................................................................................................	118,416	112,241
Accumulated other comprehensive loss ...........................................................................	(717)	(772)
Accumulated deficit ..............................................................................................................	(1,012,500)	(970,959)
Total stockholders’ deficit ........................................................................................	(894,795)	(859,484)
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit ..........................................................................................................................	$159,363	$118,704

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

HeartFlow Holding, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)

(unaudited)


	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
Revenue .....................................................................................	$43,424	$31,054	$80,629	$57,897
Cost of revenue .........................................................................	10,646	7,215	19,910	14,635
Gross profit ...........................................................................	32,778	23,839	60,719	43,262
Operating expenses:
Research and development .................................................	15,032	9,932	28,956	19,375
Selling, general and administrative .....................................	31,461	28,084	62,980	54,122
Total operating expenses ...................................................	46,493	38,016	91,936	73,497
Loss from operations ..........................................................	(13,715)	(14,177)	(31,217)	(30,235)
Interest income ..........................................................................	635	1,142	1,178	2,654
Interest expense .......................................................................	(6,621)	(6,075)	(11,714)	(12,318)
Change in fair value of common stock warrant liability ......	(863)	(3,906)	(2,469)	(3,905)
Change in fair value of derivative liability ..............................	11,538	(161)	2,493	(222)
Other income (expense), net ..................................................	(111)	(82)	247	(237)
Loss before provision for income taxes ...........................	(9,137)	(23,259)	(41,482)	(44,263)
Provision for income taxes ......................................................	(59)	(120)	(59)	(48)
Net loss .................................................................................	$(9,196)	$(23,379)	$(41,541)	$(44,311)
Comprehensive loss:
Net loss ......................................................................................	$(9,196)	$(23,379)	$(41,541)	$(44,311)
Other comprehensive loss:
Foreign currency translation gain (loss) ................................	291	(100)	55	(99)
Total comprehensive loss ...................................................	$(8,905)	$(23,479)	$(41,486)	$(44,410)

Net loss per share, basic and diluted ....................................	$(1.46)	$(4.66)	$(6.66)	$(8.89)
Weighted-average shares used to compute net loss per share, basic and diluted ...........................................................	6,316,315	5,020,758	6,240,885	4,982,094

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

HeartFlow Holding, Inc.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Deficit

(in thousands, except share and per share amounts)

(unaudited)


	Redeemable Convertible Preferred Stock		Common Stock		Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total Stockholders’ Deficit
	Shares	Amount	Shares	Amount	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total Stockholders’ Deficit
Balance at December 31, 2024 ...................	122,231,454	$768,566	6,122,048	$6	$112,241	$(772)	$(970,959)	$(859,484)
Issuance of common stock upon exercise of stock options ..........................	—	—	130,813	—	578	—	—	578
Stock-based compensation expense .....	—	—	—	—	2,492	—	—	2,492
Foreign currency translation loss ............	—	—	—	—	—	(236)	—	(236)
Net loss .......................................................	—	—	—	—	—	—	(32,345)	(32,345)
Balance at March 31, 2025 ..........................	122,231,454	768,566	6,252,861	6	115,311	(1,008)	(1,003,304)	(888,995)
Issuance of common stock upon exercise of stock options ..........................	—	—	136,583	—	852	—	—	852
Stock-based compensation expense .....	—	—	—	—	2,253	—	—	2,253
Foreign currency translation gain ...........	—	—	—	—	—	291	—	291
Net loss .......................................................	—	—	—	—	—	—	(9,196)	(9,196)
Balance at June 30, 2025 .............................	122,231,454	$768,566	6,389,444	$6	$118,416	$(717)	$(1,012,500)	$(894,795)


	Redeemable Convertible Preferred Stock		Common Stock		Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total Stockholders’ Deficit
	Shares	Amount	Shares	Amount	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total Stockholders’ Deficit
Balance at December 31, 2023 ...................	122,231,454	$768,566	4,940,925	$5	$97,465	$(501)	$(874,533)	$(777,564)
Issuance of common stock upon exercise of stock options ..........................	—	—	10,561	—	77	—	—	77
Stock-based compensation expense .....	—	—	—	—	2,723	—	—	2,723
Foreign currency translation gain ...........	—	—	—	—	—	1	—	1
Net loss .......................................................	—	—	—	—	—	—	(20,932)	(20,932)
Balance at March 31, 2024 ..........................	122,231,454	768,566	4,951,486	5	100,265	(500)	(895,465)	(795,695)
Issuance of common stock upon exercise of stock options ..........................	—	—	613,614	1	1,616	—	—	1,617
Stock-based compensation expense .....	—	—	—	—	2,640	—	—	2,640
Foreign currency translation loss ............	—	—	—	—	—	(100)	—	(100)
Net loss .......................................................	—	—	—	—	—	—	(23,379)	(23,379)
Balance at June 30, 2024 .............................	122,231,454	$768,566	5,565,100	$6	$104,521	$(600)	$(918,844)	$(814,917)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

HeartFlow Holding, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


	Six Months Ended June 30,
	2025	2024
Cash flows from operating activities:
Net loss ......................................................................................................................................................................................	$(41,541)	$(44,311)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization .........................................................................................................................................	2,767	2,378
Stock-based compensation expense .............................................................................................................................	4,745	5,363
Amortization of debt discount and debt issuance costs ..............................................................................................	3,765	1,333
Amortization of right-of-use asset ...................................................................................................................................	1,472	1,349
Change in fair value of common stock warrant liability ...............................................................................................	2,469	3,905
Change in fair value of derivative liability.......................................................................................................................	(2,493)	222
Non-cash interest charges ...............................................................................................................................................	1,110	388
Change in allowance for credit losses ............................................................................................................................	(171)	(1)
Changes in assets and liabilities: ....................................................................................................................................
Accounts receivable, net ...........................................................................................................................................	(4,877)	(3,573)
Prepaid expenses and other current assets ...........................................................................................................	(2,413)	(913)
Other non-current assets ...........................................................................................................................................	(1,883)	(937)
Accounts payable .......................................................................................................................................................	(1,433)	(1,453)
Accrued expenses and other current liabilities ......................................................................................................	(267)	(6,885)
Operating lease liabilities ...........................................................................................................................................	(1,787)	(1,563)
Other non-current liabilities .......................................................................................................................................	67	2
Net cash used in operating activities ................................................................................................................	(40,470)	(44,696)
Cash flows from investing activities
Purchase of property and equipment .............................................................................................................................	(1,891)	(3,005)
Net cash used in investing activities ................................................................................................................	(1,891)	(3,005)
Cash flows from financing activities
Proceeds from convertible notes offering, net of issuance costs ...............................................................................	72,813	—
Proceeds from exercise of stock options .......................................................................................................................	1,430	1,694
Payments of exit, prepayment penalty and lender fees ..............................................................................................	(1,066)	(1,291)
Payments of deferred offering costs ...............................................................................................................................	(2,028)	—
Net cash provided by financing activities ........................................................................................................	71,149	403
Effect of foreign exchange rates ............................................................................................................................................	55	(99)
Net increase (decrease) in cash, cash equivalents and restricted cash ..................................................................	28,843	(47,397)
Balance, beginning of period ...........................................................................................................................................	55,842	127,234
Balance, end of period ......................................................................................................................................................	$84,685	$79,837
Supplemental disclosure of cash flow information:
Cash paid (refunded) for taxes ........................................................................................................................................	$59	$(72)
Cash paid for interest ........................................................................................................................................................	$6,728	$10,618
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable .......................................................................	$26	$—
Derecognition of derivative liability in connection with debt refinancing ...................................................................	$—	$1,125
Right-of-use asset obtained in exchange for lease obligation ....................................................................................	$561	$—
Conversion of term loan principal to convertible notes ................................................................................................	$23,000	$—
Issuance of convertible notes to certain employees in lieu of cash compensation .................................................	$1,353	$—
Reclassification of term loan debt discount to convertible notes debt discount ......................................................	$239	$—
Unpaid deferred offering costs included in accounts payable and accrued expenses and other current liabilities ...............................................................................................................................................................................	$2,205	$—
Unpaid convertible notes issuance costs included in accounts payable and accrued expenses and other current liabilities .................................................................................................................................................................	$83	$—

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

HeartFlow Holding, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Business Overview

Description of Business

HeartFlow Holding, Inc. (the “Company”) was incorporated in the state of Delaware in July 2007 as

Cardiovascular Simulation, Inc. and changed its name to HeartFlow, Inc. in May 2009. On March 1, 2021,

HeartFlow, Inc. completed an internal reorganization in which a newly formed parent holding company,

HeartFlow Holding, Inc., was established.

On July 17, 2025, HeartFlow Holding, Inc.’s stockholders and Board of Directors approved the

consolidation of HeartFlow Holding, Inc. with and into HeartFlow, Inc., with HeartFlow, Inc. continuing as

the surviving company. The previous holders of HeartFlow Holding, Inc.’s common stock and preferred

securities became holders of HeartFlow, Inc.’s common stock and preferred securities based on a 1-to-1

conversion ratio, and the equity incentive plan, outstanding equity awards, outstanding warrants and

certain other equity-related agreements of HeartFlow Holding, Inc. were assumed by HeartFlow, Inc. In

connection with this consolidation, HeartFlow, Inc. changed its name to Heartflow, Inc.

The Company is a commercial-stage medical technology company that has pioneered the use of software

and artificial intelligence (“AI”) to deliver a non-invasive solution for diagnosing and managing coronary

artery disease (“CAD”). The Company’s novel Heartflow Platform uses AI and advanced computational

fluid dynamics to create a personalized 3D model of a patient’s heart based off a single coronary

computed tomography angiography (“CCTA”). This results in actionable data on blood flow, stenosis,

plaque volume and plaque composition. The Company’s HeartFlow FFRCT Analysis and Plaque Analysis

software assists physicians in diagnosing, managing and delivering precision care to patients with CAD.

The Company was awarded Conformité Européene Mark for its HeartFlow FFRCT Analysis in July 2011.

The Company received clearance from the U.S. Food and Drug Administration (“FDA”) in November 2014

for its HeartFlow FFRCT Analysis and in October 2022 for its Plaque Analysis.

The Company’s headquarters is located in Mountain View, California, and the Company also has offices

in Santa Rosa, California, Austin, Texas, and Tokyo, Japan.

The Company had the following wholly-owned subsidiaries as of June 30, 2025:


Entity Name		Country of Incorporation
HeartFlow, Inc. ...............................................................		United States
HeartFlow Japan G.K. ..................................................		Japan
HeartFlow U.K. Ltd ........................................................		United Kingdom
HeartFlow Technology U.K. Limited ...........................		United Kingdom

Effective July 2024, HeartFlow International Sarl, a wholly-owned subsidiary in Switzerland, was

dissolved.

Reverse Stock Split

On July 31, 2025, the Company’s Board of Directors approved an amendment to the Company's

amended and restated certificate of incorporation to immediately effect a reverse stock split of the shares

of the Company’s outstanding common stock at a ratio of 1.0-for-2.92 (the “Reverse Stock Split”). The

number of authorized shares and par value per share were not adjusted as a result of the Reverse Stock

Split. All references to shares, options to purchase common stock, share amounts, per share amounts,

and related information contained in the condensed consolidated financial statements have been

retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. The

shares of common stock underlying outstanding stock options and other equity instruments were

proportionately reduced and the respective exercise prices, if applicable, were proportionately increased

in accordance with the terms of the agreements governing such securities. In addition, the conversion

Table of Contents

HeartFlow Holding, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

ratios for each series of the Company’s redeemable convertible preferred stock, which automatically

converted into shares of common stock upon the closing of the Company’s initial public offering (“IPO”) of

common stock, were proportionally adjusted.

Initial Public Offering

On August 11, 2025, the Company completed its IPO of 19,166,667 shares of its common stock, which

included 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 gross proceeds to

the Company from the IPO were approximately $364.2 million, before deducting underwriting discounts

and commissions and estimated offering expenses payable by the Company of $31.4 million. The shares

and proceeds from the Company’s IPO and the underwriters’ exercise of their option to purchase

additional shares are not reflected in the condensed consolidated financial statements as of and for the

three and six months ended June 30, 2025. Immediately prior to the closing of the Company’s IPO, all of

the outstanding shares of the Company’s redeemable convertible preferred stock converted into shares of

the Company’s common stock. Additionally, upon the closing of the Company’s IPO, the aggregate

outstanding principal balance under the 2025 Convertible Notes automatically converted into shares of

the Company’s common stock.

Liquidity

The Company has incurred operating losses and negative cash flows from operations since its inception

and has an accumulated deficit of approximately $1.0 billion and $971.0 million as of June 30, 2025 and

December 31, 2024, respectively. The Company expects to incur losses for the foreseeable future.

Historically, the Company’s activities have been financed through sales of shares of redeemable

convertible preferred stock, common stock and convertible promissory notes, borrowings under term

loans and revenue received from customers.

As of June 30, 2025 and December 31, 2024, the Company had $80.2 million and $51.4 million in cash

and cash equivalents, respectively.

On August 11, 2025, the Company completed its IPO and received gross proceeds of approximately

$364.2 million, before deducting underwriting discounts and commissions and estimated offering

expenses payable by the Company.

Based on the Company’s current operating plan, the Company believes that the expected cash generated

from revenue transactions with customers and its existing cash and cash equivalents, together with the

net proceeds from the IPO, will be sufficient to fund the Company’s planned operating expenses and

capital expenditure requirements for at least the next 12 months from the date these condensed

consolidated financial statements were available to be issued.

However, the Company may experience lower than expected cash generated from operating activities or

greater than expected capital expenditures, cost of revenue, or operating expenses and may need to

raise additional capital to fund operations, further research and development activities, or acquire, invest

in, or license other businesses, assets, or technologies. The Company’s future capital needs will depend

upon many factors, including the market acceptance of the Company’s products, the cost and pace of

developing new products, and the costs of supporting sales growth.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of the Company as

well as its wholly owned subsidiaries and have been prepared in accordance with accounting principles

generally accepted in the United States of America (“U.S. GAAP”). All significant intercompany balances

and transactions have been eliminated in consolidation.

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HeartFlow Holding, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The unaudited interim condensed consolidated financial statements have been prepared on the same

basis as the annual consolidated financial statements and, in the opinion of management, reflect all

adjustments, which include only normal recurring adjustments, necessary to a fair statement of the

Company’s consolidated financial position as of June 30, 2025, and the results of its operations for the

three and six months ended June 30, 2025 and 2024 and cash flows for the six months ended June 30,

2025 and 2024. The condensed consolidated balance sheet at December 31, 2024, was derived from

audited annual consolidated financial statements but does not contain all of the footnote disclosures from

the annual financial statements. These interim financial results are not necessarily indicative of results

expected for the full fiscal year or for any subsequent interim period and should be read in conjunction

with the annual consolidated financial statements included in the Company’s registration statement on

Form S-1 (File No. 333-288733), which became effective on August 7, 2025.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make

estimates and assumptions that affect the amounts reported in the financial statements and

accompanying notes. Management used significant judgement when making estimates in the

determination of the fair value of its common stock and stock options, deferred income tax valuation

allowance, capitalized internal-use software, depreciation of property and equipment, allowance for credit

losses, revenue recognition, valuation of operating lease right-of-use (“ROU”) assets and operating lease

liabilities, and the fair value of convertible debt, common stock warrant liability and derivative liability.

Management evaluates its estimates and assumptions on an ongoing basis using historical experience

and other factors and adjusts those estimates and assumptions as facts and circumstances dictate.

Actual results could materially differ from those estimates.

Segment Information

The Company operates and manages its business as one reportable and operating segment, which is the

business of non-invasive CAD detection solutions. The Company’s Chief Executive Officer, who is the

Chief Operating Decision Maker (“CODM”), reviews financial information, including revenue and net loss,

presented on a consolidated basis for purposes of making operating decisions, allocating resources and

evaluating financial performance.

The Company's measure of segment profit or loss is consolidated net loss, which is used by the CODM to

measure actual results versus expectations, set performance metrics, and develop the annual budget to

achieve the Company’s long-term objectives. Significant segment expenses within consolidated net loss

includes cost of revenue, research and development, and selling, general and administrative expenses,

which are each separately presented on the Company’s condensed consolidated statements of

operations and comprehensive loss. Other expense items that are presented on the condensed

consolidated statements of operations include interest income, interest expense, changes in fair value of

warrant liability, other income, net, and provision for income taxes.

The following table is representative of the significant expense categories regularly provided to the CODM

when managing the Company’s single reporting segment and includes a reconciliation to the consolidated

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HeartFlow Holding, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

net loss shown in the condensed consolidated statements of operations and comprehensive loss for the

three and six months ended June 30, 2025 and 2024 (in thousands):


	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
Revenue ................................................................	$43,424	$31,054	$80,629	$57,897
Less(1):
Cost of revenue ...............................................	10,646	7,215	19,910	14,635
Research and development expenses:
Research and development .....................	8,995	6,223	17,322	12,120
Regulatory and clinical ..............................	6,037	3,709	11,633	7,254
Selling, general and administrative expenses:
Sales ............................................................	18,485	17,406	35,438	32,962
Marketing .....................................................	4,481	2,952	9,163	5,852
General and administrative .......................	8,495	7,726	18,380	15,309
Loss from operations ...........................................	(13,715)	(14,177)	(31,217)	(30,235)
Other income (expense), net(2) .....................	4,578	(9,082)	(10,265)	(14,028)
Provision for income taxes ............................	(59)	(120)	(59)	(48)
Segment net loss .................................................	$(9,196)	$(23,379)	(41,541)	$(44,311)

(1)The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

(2)Other income (expense), net represents the consolidated amounts for interest income, interest expense, change in fair value of

common stock warrant liability, change in fair value of derivative liability and other income (expense), net as shown on the condensed

consolidated statements of operations and comprehensive loss.

The Company derives revenue and has long-lived assets primarily in the United States of America.

Revenue by geography is further described in Note 3.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments that are readily convertible to known amounts of

cash and purchased with an original maturity of three months or less to be cash equivalents. Cash

equivalents consist primarily of amounts invested in money market accounts.

The following table provides a reconciliation of cash, cash equivalents and restricted cash to the total

shown in the condensed consolidated statements of cash flows (in thousands):


	June 30,
	2025	2024
Cash and cash equivalents ...............................................................................	$80,210	$75,370
Restricted cash ....................................................................................................	4,475	4,467
Total cash, cash equivalents and restricted cash ..........................................	$84,685	$79,837

As of June 30, 2025 and December 31, 2024, restricted cash represents deposits held as security in

connection with the Company’s facility lease agreements.

Fair Value of Financial Instruments

The Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value

is an exit price, representing the amount that would be received to sell an asset or paid to transfer a

liability in an orderly transaction between market participants. As such, fair value is a market-based

Table of Contents

HeartFlow Holding, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

measurement that should be determined based on assumptions that market participants would use in

pricing an asset or a liability.

The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that

prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest

priority to valuations based upon unadjusted quoted prices in active markets for identical assets or

liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs

that are significant to the valuation (Level 3 measurements). The accounting guidance establishes three

levels of the fair value hierarchy as follows:

Level 1 - Observable inputs, such as quoted prices in active markets for identical assets or liabilities;

Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or

liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be

corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to

the fair value of the assets or liabilities.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of

input that is significant to the fair value measurement. The Company’s assessment of the significance of a

particular input to the fair value measurement in its entirety requires management to make judgments and

considers factors specific to the asset or liability.

As of June 30, 2025 and December 31, 2024, the carrying amounts of the Company’s financial

instruments, including cash equivalents, accounts receivable, accounts payable and accrued liabilities,

approximate fair value due to their relatively short maturities and market interest rates, if applicable.

Management believes that the Company’s Term Loan and 2025 Convertible Notes bear interest at the

prevailing market rates for instruments with similar characteristics; accordingly, the carrying value of these

instruments approximate its fair value. Fair value accounting is applied to the common stock warrant

liability and derivative liability. No derivative liability was outstanding as of December 31, 2024.

Concentration of Credit Risk and Significant Customers

Financial instruments that potentially subject the Company to credit risk consist primarily of cash and cash

equivalents, restricted cash and accounts receivable. The Company maintains bank deposits in federally

insured financial institutions and these deposits may at times exceed federally insured limits. To date, the

Company has not experienced any losses on its cash deposits. The Company currently has full control of

its cash and cash equivalents balance.

No single customer represented more than 10% of the Company’s revenue during the three and six

months ended June 30, 2025 and 2024.

No single customer represented more than 10% of the Company’s accounts receivable as of June 30,

2025 and December 31, 2024.

Deferred Offering Costs

The Company capitalizes certain legal, accounting and other third-party fees that are directly associated

with in-process equity financings as deferred offering costs until such financings are consummated. After

consummation of the equity financing, these costs are recorded as a reduction of the proceeds from the

offering, either as a reduction of the carrying value of preferred stock or in stockholders’ deficit as a

reduction of additional paid-in capital generated as a result of the offering. Should the in-process equity

financing be abandoned, the deferred offering costs would be expensed immediately as a charge to

operating expenses in the condensed consolidated statements of operations and comprehensive loss. As

of June 30, 2025 and December 31, 2024, deferred offering costs of $4.2 million and $413,000,

Table of Contents

HeartFlow Holding, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

respectively, were capitalized within other non-current assets in the condensed consolidated balance

sheets. The deferred offering costs were reclassified as a reduction to equity as a result of the closing of

the IPO in August 2025.

Leases

At the inception of a contractual arrangement, the Company determines whether the contract contains a

lease by assessing whether there is an identified asset and whether the contract conveys the right to

control the use of the identified asset in exchange for consideration over a period of time.

An ROU asset and corresponding lease liability are recorded on the condensed consolidated balance

sheets based on the present value of lease payments over the lease term. An ROU asset represents the

right to control the use of an identified asset over the lease term and a lease liability represents the

obligation to make lease payments arising from the lease. Leases with an initial term of 12 months or less

are not recorded in the condensed consolidated balance sheets. The Company uses its incremental

borrowing rate to determine the present value of lease payments, as the discount rate implicit in the lease

is not readily available. The lease terms used to calculate the ROU asset and related lease liabilities

include options to extend or terminate the lease when it is reasonably certain that the Company will

exercise that option. The Company elected to account for contracts that contain lease and non-lease

components as a single lease component. For the three and six months ended June 30, 2025 and 2024,

the Company’s only leases were for its facilities, which are classified as operating leases with lease

expense recognized on a straight-line basis over the lease term. Variable lease costs, which primarily

consist of common area maintenance, taxes, and utility charges are expensed as incurred. The Company

does not have any finance leases.

Term Loan

The Term Loan is accounted for at amortized cost. Original debt issuance costs are deferred and

presented as a reduction to the carrying value of the Term Loan. Debt discount and debt issuance costs

are amortized using the effective interest method and recorded in interest expense within the condensed

consolidated statements of operations and comprehensive loss. Refer to Note 8 for additional information.

2025 Convertible Notes

The Company issued convertible notes in January 2025 and March 2025 (the “2025 Convertible Notes”)

to various investors and certain employees (the “Requisite Holders”), which are accounted for at

amortized cost. Debt issuance costs are deferred and presented as a reduction to the carrying value of

the 2025 Convertible Notes. The Company determined that certain features of the 2025 Convertible

Notes contain embedded derivatives that provide the Requisite Holders with multiple settlement

alternatives and the embedded features that qualified as derivatives were accounted for separately. Debt

discount and debt issuance costs are amortized using the effective interest method and recorded to

interest expense within the condensed consolidated statements of operations and comprehensive loss.

The Company recognized the changes in fair value of the derivative liability as changes in fair value of

derivative liability within the condensed consolidated statements of operations and comprehensive loss.

Refer to Note 9 and Note 13 for additional information.

Common Stock Warrants

The Company’s warrants to purchase common stock that were issued in connection with the Term Loan

are classified as a liability. The warrants are recorded at fair value upon issuance and are subject to

remeasurement to fair value at each balance sheet date, with any changes in fair value recognized as a

change in fair value of common stock warrant within the condensed consolidated statements of

operations and comprehensive loss. Refer to Note 12 for additional information.

Table of Contents

HeartFlow Holding, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Embedded Derivatives

Prior to its refinancing in June 2024, the Term Loan contained certain prepayment features, default put

option and default interest adjustment features that were determined to be embedded derivatives

requiring bifurcation and separate accounting as a single compound derivative, as discussed in Note 13.

The impact of bifurcation of the embedded derivative on the date of issuance was reflected as a debt

discount. The fair value of the derivative liability related to the Company’s Term Loan, as discussed in

Note 8, was estimated using a scenario-based analysis comparing the probability-weighted present value

of the Term Loan payoff at maturity with and without the bifurcated features. This method isolates the

value of the embedded derivative by measuring the difference in the host contract’s value with and

without the isolated features. The resulting cash flows are discounted at the Company’s borrowing rate,

as adjusted for fluctuations in the market interest rate from the inception of the Company’s comparative

borrowings to the reporting date, to measure the fair value of the embedded derivative. Until its

derecognition in June 2024, the derivative liability was remeasured to fair value at each reporting period

and the related change was reflected as change in fair value of derivative liability on the condensed

consolidated statements of operations and comprehensive loss.

The 2025 Convertible Notes contain certain settlement features and default put options that were

determined to be embedded derivatives requiring bifurcation and separate accounting as a single

compound derivative, as discussed in Note 13. The impact of bifurcation of the embedded derivatives on

the date of issuances in January and March 2025 was reflected as a debt discount. The fair value of the

derivative liability related to the Company’s 2025 Convertible Notes, as discussed in Note 9, were

estimated using a scenario-based analysis comparing the probability-weighted present value of the 2025

Convertible Notes with and without the bifurcated features. This method isolates the value of the

embedded derivatives by measuring the difference in the host contract’s value with and without the

isolated features. To measure the fair value of the embedded derivatives, the resulting cash flows were

discounted using appropriate discount rates that reflect the overall implied risk of the instruments based

on their purchase prices and adjusted for fluctuations in the market and Company interest rates when

necessary. The derivative liability was remeasured to fair value at each reporting period and the related

change was reflected as change in fair value of derivative liability on the condensed consolidated

statements of operations and comprehensive loss for the three and six months ended June 30, 2025.

Redeemable Convertible Preferred Stock

The Company records redeemable convertible preferred stock at fair value on the dates of issuance, net

of issuance costs. The redeemable convertible preferred stock is recorded outside of stockholders’ deficit

because the preferred shares are contingently redeemable upon the occurrence of an event that is

outside of the Company’s control. The Company has elected not to adjust the carrying values of the

redeemable convertible preferred stock to the liquidation preferences of such shares because it is

uncertain whether or when an event would occur that would obligate the Company to pay the liquidation

preferences to holders of shares of redeemable convertible preferred stock. Subsequent adjustments to

the carrying values to the liquidation preferences will be made only when it becomes probable that such

liquidation event will occur. The redemption value of each series of redeemable convertible preferred

stock is equal to their respective original issue price plus accrued but unpaid dividends on Series C

redeemable convertible preferred shares and all declared but unpaid dividends (if any) for other series of

redeemable convertible preferred shares. In connection with the Series F redeemable convertible

preferred stock financing, the cumulative dividends payable to holders of Series C redeemable convertible

preferred stock upon a liquidation event were capped from $6.66 to $8.25 per share depending on the

time of issuance, with an aggregate total of $88.5 million as of June 30, 2025 and December 31, 2024.

Refer to Note 10 for additional information.

Table of Contents

HeartFlow Holding, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Revenue Recognition

The Company sells its Heartflow Platform to medical providers in the United States and in select

international markets. The Company determines revenue recognition through the following steps:

•Identification of the contract, or contracts, with a customer;

•Identification of the performance obligations in the contract;

•Determination of the transaction price;

•Allocation of the transaction price to the performance obligations in the contract; and

•Recognition of revenue when, or as, the Company satisfies a performance obligation.

The Company identified a single performance obligation, which is comprised of a highly interdependent

bundle of goods or services that are not distinct on their own but are as a group and consists of providing

implementation services and the requested analysis, including an image file and related licenses and

support. Revenue recognition commences only after completion of installation, implementation and

training for new customer accounts. The Company’s service consists of providing a visualization of the

patient’s coronary arteries and enables physicians to create more effective treatment plans. This service

is normally billable upon delivery of the analysis to the physician. Payment terms are generally net 30

days.

Substantially all of the Company’s revenue is from usage-driven fees and generated on a “pay-per-click”

basis each time a physician orders the Company’s HeartFlow FFRCT Analysis and Plaque Analysis.

Revenue is recognized when control of these services is transferred to the customer, at an amount that

reflects the consideration the Company expects to be entitled to receive in exchange for those services.

The Company recognizes usage-driven fee revenue upon delivery of the requested analysis to the

physician, which is when control of these services is transferred to the customer. The Company

recognizes revenue on a straight-line basis over the contract term for subscriptions where the customer

pays a fixed amount upfront for unlimited analyses. Contracts with customers typically include a fixed

amount of consideration and are generally cancellable with 30 days’ written notice.

The transaction price consists of fixed consideration and variable consideration related to utilization and

volume rebates for reimbursement claims from government and commercial payers which are known and

determinable based on the number of analyses delivered within each quarterly period. The transaction

price (inclusive of both fixed consideration and variable consideration that is not constrained) is

recognized as revenue when control transfers. The Company uses a portfolio approach to estimate

variable consideration using the expected value method.

Unbilled Receivables

Unbilled receivables generally represent revenue in which the Company has satisfied its performance

obligation prior to invoicing. The Company records unbilled receivables within accounts receivable, net on

the condensed consolidated balance sheets, based on the Company’s unconditional right to payment at

the end of the applicable period.

Contract Costs

Costs associated with product revenue include a flat rate commission per analysis and new customer site

commissions as well as implementation and onboarding costs. The Company capitalizes new customer

site commissions and certain implementation and onboarding costs that are considered to be incremental

to the acquisition of new customer contracts. Capitalized implementation and onboarding costs are

amortized over an estimated period of benefit of two years and capitalized new site commission costs are

amortized over an estimated period of benefit of three years. The estimated period of benefit is

determined by evaluating average customer life, the nature of the related benefit, and the specific facts

Table of Contents

HeartFlow Holding, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

and circumstances of its arrangements. The Company evaluates these assumptions at least annually and

periodically reviews whether events or changes in circumstances have occurred that could impact the

period of benefit.

The Company expenses flat rate commissions when incurred as commensurate with its usage-driven fee

revenue recognition and amortizes capitalized new customer site commissions to selling, general and

administrative expense in the condensed consolidated statements of operations and comprehensive loss.

The Company amortizes capitalized implementation and onboarding costs to cost of revenue in the

condensed consolidated statements of operations and comprehensive loss. Short-term capitalized

contract costs are included in prepaid expenses and other current assets, and the long-term portion is

included in other non-current assets in the condensed consolidated balance sheets.

Remaining Performance Obligations

Revenue allocated to remaining performance obligations represents the transaction price allocated to

performance obligations that are unsatisfied, or partially unsatisfied. It includes contract liabilities and

amounts that will be invoiced and recognized as revenue in future periods and does not include contracts

where the customer is not committed. The customer is not considered committed when they are able to

terminate for convenience without payment of a substantive penalty under the contract. Additionally, as a

practical expedient, the Company has not disclosed the value of unsatisfied performance obligations for

contracts with an original expected length of one year or less.

Contract Liabilities

The Company records contract liabilities when billings or payments are received in advance of revenue

recognition from subscription services. The contract liabilities balance is reduced as the revenue

recognition criteria is met, generally within 12 months. Once services are available to customers, the

Company records amounts due in accounts receivable, net and contract liabilities within accrued

expenses and other current liabilities on the condensed consolidated balance sheets. To the extent the

Company bills customers in advance of the billing period commencement date, the accounts receivable

and corresponding contract liabilities amount are netted to zero on the condensed consolidated balance

sheets, unless such amounts have been paid as of the balance sheet date.

Cost of Revenue

Cost of revenue includes, but is not limited to, personnel and related expenses, stock-based

compensation costs, 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 the Company’s Heartflow Platform and allocated overhead, including rent,

equipment, depreciation, technology services and utilities, related to the Company’s production team. The

role of the production team is to support the Company’s patient case volume revenue by performing

defined quality-related activities on CCTA scans submitted by its customers for analysis. The production

team also supports activities in the Company’s clinical trials and research and development, which are

allocated as research and development expense.

Stock-Based Compensation

The Company accounts for share-based payments at fair value. The grant date fair value of options

granted is measured using the Black-Scholes option pricing model. Option awards vest based on the

satisfaction of a service requirement and stock-based compensation expense is recorded on a straight-

line basis over the applicable service period, which is generally four years. For performance-based stock

options, the Company will assess the probability of performance conditions being achieved in each

reporting period. The amount of stock-based compensation expense recognized in any one period related

to performance-based stock options can vary based on the achievement or anticipated achievement of

the performance conditions. Forfeitures are recognized in the period in which the forfeiture occurs.

Table of Contents

HeartFlow Holding, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Income Taxes

The Company accounts for income taxes under the asset and liability method. Under this method,

deferred tax assets and liabilities are determined based on the temporary differences between the

financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in

which the differences are expected to reverse. As a result of the history of net operating losses, the

Company has provided for a full valuation allowance against the deferred tax assets for assets that are

not more-likely-than-not to be realized.

The Company applies a comprehensive model for the recognition, measurement, presentation and

disclosure in the condensed consolidated financial statements of any uncertain tax positions that have

been taken or are expected to be taken on a tax return using a two-step approach. The first step is to

evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of

available evidence indicates that it is more likely than not that the tax position will be sustained upon

examination by the relevant taxing authorities, based on the technical merits of the position. For tax

positions that are more likely than not to be sustained upon audit, the second step is to measure the tax

benefit in the financial statements as the largest benefit that has a greater than 50% likelihood of being

sustained upon settlement. Significant judgment is required to evaluate uncertain tax positions. Changes

in facts and circumstances could have a material impact on the Company’s effective tax rate and results

of operations. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits

as a component of provision for income taxes in the condensed consolidated statements of operations

and comprehensive loss.

Comprehensive Loss

Comprehensive loss is comprised of net loss and foreign currency translation gains and losses.

Foreign Currency

The functional currency of the Company’s foreign subsidiaries is the local currency except for HeartFlow

International Sarl, which was the U.S. Dollar. For all non-functional currency balances, the

remeasurement of such balances to the functional currency results in either a foreign exchange

transaction gain or loss, which is recorded within other income, net within the condensed consolidated

statements of operations and comprehensive loss. The Company recognized foreign exchange

transaction (gain) loss of $(110,000) and $195,000 during the three months ended June 30, 2025 and

2024, respectively, and $247,000 and $58,000 during the six months ended June 30, 2025 and 2024,

respectively. During the three months ended June 30, 2025 and 2024, the Company recognized

$(291,000) and $100,000, respectively, and $(55,000) and $99,000 during the six months ended June 30,

2025 and 2024, respectively, of foreign currency translation (gain) loss in the statements of

comprehensive loss related to foreign subsidiaries which have local functional currencies.

Net Loss Per Share

Basic net loss per common share is calculated by dividing the net loss by the weighted-average number

of shares of common stock outstanding during the period, without consideration of potentially dilutive

securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average

number of shares of common stock and potentially dilutive securities outstanding for the period. For

purposes of the diluted net loss per share calculation, the redeemable convertible preferred stock,

common stock warrants and stock options are considered to be potentially dilutive securities.

Basic and diluted net loss per share is presented in conformity with the two-class method required for

participating securities as the redeemable convertible preferred stock and common stock subject to

repurchase are considered participating securities. The Company’s participating securities do not have a

contractual obligation to share in the Company’s losses. As such, the net loss is attributed entirely to

common stockholders. Diluted net loss per share is the same as basic net loss per share because the

Table of Contents

HeartFlow Holding, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

effects of potentially dilutive items were anti-dilutive given the Company’s net loss position during the

three and six months ended June 30, 2025 and 2024.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards

Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified

effective date. The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our

Business Startups Act of 2012 and has elected not to “opt out” of the extended transition related to

complying with new or revised accounting standards, which means that when a standard is issued or

revised and it has different application dates for public and nonpublic companies, the Company will adopt

the new or revised standard at the time nonpublic companies adopt the new or revised standard and will

do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition

period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early

adopt any new or revised accounting standards whenever such early adoption is permitted for nonpublic

companies.

Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income

Tax Disclosures, which requires enhanced income tax disclosures, including specific categories and

disaggregation of information in the effective tax rate reconciliation, disaggregated information related to

income taxes paid, income or loss from continuing operations before income tax expense or benefit, and

income tax expense or benefit from continuing operations. This guidance is effective for annual periods

beginning after December 15, 2024. The adoption of ASU 2023-09 is expected to have a disclosure only

impact on the Company’s consolidated financial statements for the year ended December 31, 2025.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive

Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement

Expenses, which requires more detailed disclosures about specified categories of expenses (including

employee compensation, depreciation, and amortization) included in certain expense captions presented

on the face of the income statement. This ASU is effective for fiscal years beginning after December 15,

2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption

permitted. The amendments may be applied either (i) prospectively to financial statements issued for

reporting periods after the effective date of this ASU or (ii) retrospectively to all prior periods presented in

the financial statements. The Company is currently evaluating the impact of this pronouncement on the

disclosures in its consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical

expedient related to the estimation of expected credit losses for current accounts receivable and current

contract assets that arise from transactions accounted for under Accounting Standards Codification Topic

606: Revenue from Contracts with Customers. The practical expedient permits an entity to assume that

current conditions as of the balance sheet date do not change for the remaining life of the current

accounts receivable and current contract assets. This ASU is effective for fiscal years beginning after

December 15, 2025 on a prospective basis, and for interim periods within fiscal years beginning after

December 15, 2025, with early adoption permitted. The Company is currently evaluating the impact of the

adoption of this pronouncement on its consolidated financial statements.

Table of Contents

HeartFlow Holding, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

3. Revenue and Contract Balances

Disaggregation of Revenue

The following table summarizes total revenue from customers by geographic region (in thousands):


	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
United States ...............................................................	$39,987	$28,406	$74,285	$52,800
United Kingdom ...........................................................	1,562	1,291	3,014	2,501
Japan.............................................................................	1,527	1,012	2,721	1,991
Rest of Europe .............................................................	348	345	609	605
Total revenue ...............................................................	$43,424	$31,054	$80,629	$57,897

Revenues by geography are determined based on the region of the Company's contracting entity, which

may be different than the region of the customer.

Contract Balances

Unbilled receivables included within accounts receivable on the condensed consolidated balance sheets

as of June 30, 2025 and December 31, 2024 was $820,000 and $574,000, respectively.

The following table provides the breakdown of capitalized contract costs on the condensed consolidated

balance sheets (in thousands):


	Six Months Ended June 30,	Year Ended December 31,
	2025	2024
Balance at beginning of period ..........................................................	$6,154	$2,941
Contract costs capitalized ..................................................................	4,920	6,952
Contract costs amortized ....................................................................	(2,669)	(3,739)
Balance at end of period .....................................................................	$8,405	$6,154

The following table provides the breakdown of contract liabilities included within accrued expenses and

other current liabilities on the condensed consolidated balance sheets (in thousands):


	Six Months Ended June 30,	Year Ended December 31,
	2025	2024
Balance at beginning of period ..........................................................	$182	$498
Contract liabilities added ....................................................................	—	—
Contract liabilities recognized as revenue .......................................	(51)	(316)
Balance at end of period .....................................................................	$131	$182

Table of Contents

HeartFlow Holding, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

4. Fair Value Measurement

The following table summarizes the Company’s financial assets and liabilities measured at fair value on a

recurring basis by level within the fair value hierarchy (in thousands):


	June 30, 2025
	Level 1	Level 2	Level 3	Total
Assets
Money market funds included in cash and cash equivalents ...............................................	$51,886	$—	$—	$51,886
Total ....................................................................	$51,886	$—	$—	$51,886
Liabilities
Common stock warrant liability ......................	$—	$—	$23,304	$23,304
Derivative liability ..............................................	—	—	29,407	29,407
Total ....................................................................	$—	$—	$52,711	$52,711


	December 31, 2024
	Level 1	Level 2	Level 3	Total
Assets
Money market funds included in cash and cash equivalents ...............................................	$36,882	$—	$—	$36,882
Total ....................................................................	$36,882	$—	$—	$36,882
Liabilities
Common stock warrant liability ......................	$—	$—	$20,835	$20,835
Total ....................................................................	$—	$—	$20,835	$20,835

The following tables present a reconciliation of the Company’s financial liabilities measured at fair value

as of June 30, 2025 and December 31, 2024 using significant unobservable inputs (Level 3), and the

change in fair value (in thousands):


	Common Stock Warrant Liability
Fair value as of January 1, 2024 .....................................................................................................	$4,440
Change in fair value ...........................................................................................................................	16,395
Fair value as of December 31, 2024 ...............................................................................................	20,835
Change in fair value ...........................................................................................................................	2,469
Fair value as of June 30, 2025 .........................................................................................................	$23,304

Table of Contents

HeartFlow Holding, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

In determining the fair value of the common stock warrant liability, the Company used the Black-Scholes

option pricing model to estimate the fair value using unobservable inputs including the expected term,

expected volatility, risk-free interest rate and dividend yield (see Note 12).


	Term Loan Derivative Liability
Fair value as of January 1, 2024 .....................................................................................................	903
Change in fair value ...........................................................................................................................	222
Derecognition in connection with debt refinancing .......................................................................	(1,125)
Fair value as of December 31, 2024 ...............................................................................................	$—

In determining the fair value of the term loan derivative liability, a two-step valuation approach was

employed, which included a probability-weighted scenario valuation method, the Black-Scholes-Merton

method, and the option pricing method, using unobservable inputs (see Note 13), which are classified as

Level 3 within the fair value hierarchy, and then comparing the instrument’s value with and without the

derivative features to estimate their combined fair value. The debt instrument is carried at amortized cost,

which approximates its fair value.


	2025 Convertible Notes Derivative Liability
Fair value as of January 1, 2025 ....................................................................................	$—
Recognition in connection with convertible notes offering ..........................................	31,900
Change in fair value ..........................................................................................................	(2,493)
Fair value as of June 30, 2025 ........................................................................................	$29,407

In determining the fair value of the convertible notes derivative liability, a two-step valuation approach was

employed, which included a probability-weighted scenario valuation method, the Monte Carlo Simulation

method, and the option pricing method, using unobservable inputs (see Note 13), which are classified as

Level 3 within the fair value hierarchy, and then comparing the instrument’s value with and without the

derivative features to estimate their combined fair value. The debt instrument is carried at amortized cost,

which approximates its fair value.

5. Balance Sheet Components

Allowance for Credit Losses

The following table presents a reconciliation of the allowance for credit losses (in thousands):


	Six Months Ended June 30,	Year Ended December 31,
	2025	2024
Balance at beginning of period .........................................................	$814	$1,058
Additions ..............................................................................................	—	—
Write-offs ..............................................................................................	(171)	(244)
Balance at end of period ...................................................................	$643	$814

Table of Contents

HeartFlow Holding, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets are comprised of the following (in thousands):


	Six Months Ended June 30,	Year Ended December 31,
	2025	2024
Prepaid expenses ...............................................................................	$5,304	$3,017
Contract costs, current .......................................................................	2,453	2,453
Other .....................................................................................................	788	662
Total prepaid expenses and other current assets ........................	$8,545	$6,132

Property and equipment, net

Property and equipment consisted of the following (in thousands):


	Six Months Ended June 30,	Year Ended December 31,
	2025	2024
Property and equipment at cost:
Computer equipment and software .................................................	$4,495	$4,489
Furniture, fixtures and equipment ....................................................	1,536	1,233
Capitalized internal-use software .....................................................	54,133	52,606
Leasehold improvements ..................................................................	2,138	2,057
Construction in progress ...................................................................	27	27
Total property and equipment ......................................................	62,329	60,412
Less: Accumulated depreciation and amortization ........................	(54,259)	(51,492)
Property and equipment, net ...........................................................	$8,070	$8,920

The Company capitalized certain internal-use software costs totaling $591,000 and $1.3 million, including

stock-based compensation of $5,000 and $121,000, related to internal-use software development efforts,

during the three months ended June 30, 2025 and 2024, respectively, and $1.5 million and $2.1 million,

including stock-based compensation of $11,000 and $198,000, during the six months ended June 30,

2025 and 2024, respectively. Amortization of capitalized internal-use software totaled $1.0 million and

$761,000 for the three months ended June 30, 2025 and 2024, respectively, and $2.0 million and $1.5

million for the six months ended June 30, 2025 and 2024, respectively.

Depreciation and amortization expense related to property and equipment, excluding capitalized internal-

use software, was $389,000 and $413,000 for three months ended June 30, 2025 and 2024, respectively,

and $759,000 and $885,000 for the six months ended June 30, 2025 and 2024, respectively.

Other Non-Current Assets

Other non-current assets are comprised of the following (in thousands):


	Six Months Ended June 30,		Year Ended December 31,
	2025		2024

Heartflow, Inc. 10-Q