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CapsoVision, Inc

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Business Summary

CapsoVision, Inc. is a global commercial-stage medical technology company specializing in diagnostic and screening products for the GI tract, leveraging advanced imaging and AI technologies. The company's core business model revolves around its single-use CapsoCam capsules and associated software, CapsoCloud and CapsoView, which capture and store video images of the GI tract for review by healthcare providers. Revenue is generated from the sale of these capsules and related services, with a mix of product and service revenue depending on the video delivery option chosen by the customer. Primary customer segments include gastroenterologists practicing in clinics and hospitals. The company emphasizes its 360° panoramic view, telemedicine-enabled and zero-capex "wire-free" data collection, and cloud-based remote data analysis as key competitive advantages. As of December 31, 2025, CapsoVision had over 140 issued patents globally, protecting various aspects of its capsule and technology .

The company's primary product is CapsoCam Plus, a small bowel capsule endoscopy system cleared by the FDA in 2016 and commercialized in the U.S. in 2017, and in Europe in 2012. It is used to visualize the small bowel mucosa for abnormalities in adults and children aged 2 years and above. As of December 31, 2025, CapsoCam Plus had been used in over 161,000 patients . For the fiscal year ended December 31, 2025, CapsoCam Plus generated approximately $13.6 million in revenue , an increase of approximately 15% over the $11.8 million generated in 2024. The company is developing CapsoCam Colon, a next-generation capsule endoscope for colon visualization, incorporating AI for automated polyp detection and 3D-sensing technology for polyp size measurement. The first generation CapsoCam Colon 510(k) application was submitted in June 2025 but was not pursued further due to FDA inquiries, with resources redirected to a second-generation CapsoCam Colon featuring improved imaging and AI .

For the fiscal year ended December 31, 2025, CapsoVision reported total revenue of $13.554 million , an increase of 15% from $11.756 million in 2024. Costs of revenue increased by $1.002 million , or 19% , from $5.379 million in 2024 to $6.381 million in 2025. Gross profit for 2025 was $7.173 million , up 12% from $6.377 million in 2024. The gross margin slightly decreased from 54% in 2024 to 53% in 2025. Operating expenses totaled $32.689 million in 2025, a 24% increase from $26.294 million in 2024. This resulted in an operating loss of $(25.516) million in 2025, compared to $(19.917) million in 2024. Net loss for 2025 was $(25.315) million , an increase of 27% from $(19.898) million in 2024. Diluted EPS was $(1.03) in 2025, compared to $(9.85) in 2024. As of December 31, 2025, cash and cash equivalents were $10.1 million , and the accumulated deficit was $155.7 million . Net cash used in operating activities was $22.864 million in 2025.

Year-over-year, revenue growth was approximately 15% overall, with U.S. sales growing 17% and international sales growing 8% . International sales constituted 21% of total revenue in 2025, down from 23% in 2024. The decline in gross margin from 54% to 53% was attributed to increased customs and tariffs due to changes in U.S. trade policy. Selling and marketing expenses rose by $0.6 million , or 8% , to $7.530 million due to increased sales force headcount and commission payouts. Research and development expenses increased by $3.2 million , or 21% , to $18.310 million , primarily driven by development agreements for new CMOS image sensors with Canon Inc. and ASICs with an R&D and manufacturing services vendor. General and administrative expenses saw a significant increase of $2.6 million , or 63% , to $6.849 million , largely due to higher professional service expenses, stock-based compensation, payroll, corporate insurance, and non-employee Board compensation, partially offset by payroll tax credits and foreign exchange gains.

During the reported period, CapsoVision received FDA 510(k) clearance in December 2024 for pediatric use (children aged 2 years and above) and telemedicine supervision (remote ingestion) for its CapsoCam Plus . The company submitted a 510(k) application for its updated CapsoCam Plus, incorporating AI assisted pathology detection technology, in December 2025 , targeting FDA clearance by mid-2026. The initial 510(k) submission for the first-generation CapsoCam Colon in June 2025 was withdrawn, with resources reallocated to a second-generation CapsoCam Colon, for which a new 510(k) application is expected in the third quarter of 2026 . The company also entered into a development agreement with Canon Inc. on July 15, 2025, for new CMOS image sensor samples .

Business Outlook

CapsoVision anticipates generating CapsoCam Colon-related revenues no earlier than the middle of 2027, contingent upon obtaining FDA clearance for the second generation of its CapsoCam Colon solution . The company expects to submit the 510(k) application for the second generation CapsoCam Colon to the FDA in the third quarter of 2026 . For the updated CapsoCam Plus with AI, FDA clearance is anticipated by the middle of 2026, with EU clearance in the third quarter of 2026, and commercialization in both regions shortly thereafter . The company expects to continue incurring significant losses for the foreseeable future as it scales its business, invests in R&D, expands sales and marketing, and manages public company expenses .

A major growth area for CapsoVision is the CapsoCam Colon, which aims to expand GI-tract capsule endoscopy beyond small-bowel sales. The second-generation CapsoCam Colon will feature improved imaging quality, increased field of review, AI integration, and better lenses . The company plans to seek FDA clearance for expanded indications that remove the requirement for evidence of GI bleeding of lower GI origin for patients with major risks for colonoscopy or moderate sedation, which would significantly increase the addressable market . The global colon capsule endoscopy market is forecasted to reach approximately $311 million in 2030 . Another growth area involves expanding clinical use cases and accessories for CapsoCam Plus, including a capsule delivery device with full commercialization expected in the fourth quarter of 2026 , and a patency capsule with tentative FDA 510(k) submission planned by the end of the second quarter of 2026 . These accessories are expected to enable faster penetration of the pediatric market and address Crohn's disease patients.

The company plans to continue improving and innovating its GI-tract capsule endoscopy solution, including a new lens and illumination optics for CapsoCam with an increased field of view, improved image quality, and higher peak frame rate . Investments in AI are planned to enhance pathology-detection and classification accuracy, expand AI algorithm scope, and apply AI, including large language models, to streamline diagnostic and medical-report-generation processes . Improvements to CapsoCloud and CapsoView software are also planned .

CapsoVision intends to expand into new indications beyond small bowel and colon. In the first half of 2027, clinical studies are planned to commence for CapsoCam's accuracy in screening esophageal varices in cirrhotic patients with portal hypertension . There are approximately 5.5 million people in the U.S. with Cirrhosis , and up to 85% of cirrhotic patients develop esophageal varices . In the second quarter of 2026, feasibility studies are planned to commence for CapsoCam's accuracy in detecting abnormalities indicative of cancerous and precancerous pancreatic neoplasia by visualizing abnormalities of the duodenal papilla . Pancreatic cancer is estimated to be diagnosed in 67,530 patients in the U.S. in 2026, with approximately 52,740 deaths . The company expects to resubmit a Breakthrough Device Designation application for early pancreatic cancer detection following further study .

Operationally, CapsoVision expects its costs of revenue to increase in absolute terms in line with increased revenues, and its gross profit and gross margin to be affected by selling prices, product costs, customer mix, production volumes, and product mix, with CapsoCam Colon capsules expected to have higher sales prices and related costs . Selling and marketing expenses are expected to increase in the foreseeable future as the company expands its in-house sales organization and market penetration, but are expected to decrease as a percentage of revenue as revenue grows . Research and development expenses are expected to vary due to ongoing clinical studies for CapsoCam Colon and CapsoCam Plus with AI, and additional research for CapsoCam UGI . General and administrative expenses are expected to increase in the foreseeable future due to headcount increases and public company operating costs, but are expected to decrease as a percentage of revenue as revenue grows .

CapsoVision's future capital needs depend on the cost and pace of new product development, market acceptance, regulatory approvals, reimbursement, supply chain management, sales team growth, intellectual property defense, potential acquisitions, and public company costs . The company completed a private placement on March 16, 2026, raising $14.0 million , but believes existing cash balances will not be sufficient to fund operations for at least the next 12 months after the financial statements' issuance date . Additional capital-raising activities are likely needed before year-end 2026 to fund operations and planned clinical studies . Contractual obligations at December 31, 2025, include operating lease payments of $1.0 million due within 24 months and a $2.7 million outstanding purchase commitment for a development agreement with Canon Inc. due in 15 months .

Risk Factors

CapsoVision faces substantial geopolitical and trade risks, particularly due to its reliance on single-source suppliers and assembly manufacturers in Asia, specifically Taiwan and Japan. Increased tensions between mainland China and Taiwan, potential trade wars, tariffs, and natural disasters like earthquakes and typhoons in these regions could disrupt the supply chain, increase costs, and interrupt product delivery . The company has a history of net losses, with a net loss of $25.3 million in 2025 and an accumulated deficit of $155.7 million , and its audited financial statements for 2025 and 2024 include a going concern footnote, indicating a need for additional financing . All current revenues are from CapsoCam Plus, and growth is subject to successful execution of strategies like competing against established players like Medtronic and Ankon, penetrating the pediatric market, and timely FDA/EU clearances for AI integration . Delays in obtaining 510(k) clearance for the second-generation CapsoCam Colon, which is not expected to generate revenues until mid-2027 , or for AI-enabled CapsoCam Plus, could significantly impact commercialization and revenue . Broad adoption of CapsoCam Colon depends on expanding its indicated patient population, increasing accuracy, and achieving satisfactory completion rates, all of which face execution risks . The effectiveness of CapsoCam capsules relies on patient adherence to preparation protocols and manual retrieval, and non-compliance or issues with shipping could lead to missed diagnoses, repeat procedures, or loss of data . The company also faces risks of capsule retention (reported at less than 1/10 of 1% for CapsoCam capsules sold in 2025 and 2024, but believed to be understated) and aspiration (one reported incident) . Macroeconomic conditions, including high inflation, military conflicts, and volatile exchange rates, could adversely affect demand and costs . Regulatory challenges and delays in obtaining 510(k) clearance for AI-incorporated capsules are significant, as the FDA assesses AI technology separately and the regulatory landscape for AI is rapidly changing . Inadequate reimbursement rates from Medicare and other third-party payors could materially affect commercial success . The company has identified two material weaknesses in its internal control over financial reporting related to IT general controls and segregation of duties, which could impact financial reporting accuracy and timeliness . Intellectual property risks include the expense and uncertainty of obtaining, maintaining, and enforcing patents, the limited lifespan of patents, and the potential for infringement claims or challenges to ownership .

Management Priorities

Management's message emphasizes a long-term vision of developing an ingestible capsule for multi-cancer screening across the GI tract, leveraging AI for early and precancerous detection. They highlight strategic priorities including obtaining FDA clearance for the second-generation CapsoCam Colon, with submission expected in the third quarter of 2026 , and expanding clinical use cases and accessories for CapsoCam Plus, such as a capsule delivery device expected for full commercialization in the fourth quarter of 2026 and a patency capsule with tentative FDA 510(k) submission planned by the end of the second quarter of 2026 . A key focus is on continuing to improve and innovate the GI-tract capsule endoscopy solution, including enhancements to CapsoCam's optics and AI algorithms, and expanding into new indications like esophageal varices and pancreatic cancer, with feasibility studies for pancreatic neoplasia planned for the second quarter of 2026 and clinical studies for esophageal varices in the first half of 2027 . Management acknowledges the need for additional capital, stating that existing cash balances will not be sufficient to fund operations for at least the next 12 months after the financial statements' issuance date , and that additional capital-raising activities will likely be needed before year-end 2026 .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — CapsoCam Plus
  2. [2] Item 1, Business — CapsoCam Plus
  3. [3] Item 1, Business — CapsoCam Plus
  4. [4] Item 1, Business — CapsoCam Plus
  5. [5] Item 1, Business — Our Growth Strategies
  6. [6] Item 7, MD&A — Results of Operations for the Years ended December 31, 2025 and 2024
  7. [7] Item 7, MD&A — Revenue
  8. [8] Item 7, MD&A — Results of Operations for the Years ended December 31, 2025 and 2024
  9. [9] Item 7, MD&A — Costs of Revenue
  10. [10] Item 7, MD&A — Costs of Revenue
  11. [11] Item 7, MD&A — Costs of Revenue
  12. [12] Item 7, MD&A — Costs of Revenue
  13. [13] Item 7, MD&A — Gross Profit and Gross Margin
  14. [14] Item 7, MD&A — Gross Profit and Gross Margin
  15. [15] Item 7, MD&A — Gross Profit and Gross Margin
  16. [16] Item 7, MD&A — Gross Profit and Gross Margin
  17. [17] Item 7, MD&A — Gross Profit and Gross Margin
  18. [18] Item 7, MD&A — Operating Expenses
  19. [19] Item 7, MD&A — Operating Expenses
  20. [20] Item 7, MD&A — Operating Expenses
  21. [21] Item 7, MD&A — Results of Operations for the Years ended December 31, 2025 and 2024
  22. [22] Item 7, MD&A — Results of Operations for the Years ended December 31, 2025 and 2024
  23. [23] Item 7, MD&A — Net Loss
  24. [24] Item 7, MD&A — Net Loss
  25. [25] Item 7, MD&A — Net Loss
  26. [26] Item 7, MD&A — Results of Operations for the Years ended December 31, 2025 and 2024
  27. [27] Item 7, MD&A — Results of Operations for the Years ended December 31, 2025 and 2024
  28. [28] Item 7, MD&A — Liquidity and Capital Resources Overview
  29. [29] Item 7, MD&A — Liquidity and Capital Resources Overview
  30. [30] Item 7, MD&A — Net Cash Used in Operating Activities
  31. [31] Item 7, MD&A — Revenue
  32. [32] Item 7, MD&A — Revenue
  33. [33] Item 7, MD&A — Revenue
  34. [34] Item 7, MD&A — Revenue
  35. [35] Item 7, MD&A — Selling and Marketing Expenses
  36. [36] Item 7, MD&A — Selling and Marketing Expenses
  37. [37] Item 7, MD&A — Selling and Marketing Expenses
  38. [38] Item 7, MD&A — Research and Development Expenses
  39. [39] Item 7, MD&A — Research and Development Expenses
  40. [40] Item 7, MD&A — Research and Development Expenses
  41. [41] Item 7, MD&A — General and Administrative Expenses
  42. [42] Item 7, MD&A — General and Administrative Expenses
  43. [43] Item 7, MD&A — General and Administrative Expenses
  44. [44] Item 1, Business — CapsoCam Plus
  45. [45] Item 1, Business — Intellectual Property
  46. [46] Item 7, MD&A — Overview
  47. [47] Item 1A, Risk Factors — CapsoCam Colon is our initial strategic effort to expand revenues for our GI-tract capsule endoscopy solution beyond small-bowel-related sales; we do not currently expect to generate CapsoCam Colon-related revenues until FDA clearance for the second generation of our CapsoCam Colon solution.
  48. [48] Item 7, MD&A — Liquidity and Capital Resources Overview
  49. [49] Item 1, Business — Our Growth Strategies
  50. [50] Item 1, Business — Our Growth Strategies
  51. [51] Item 1, Business — Our Growth Strategies
  52. [52] Item 1, Business — Our Growth Strategies
  53. [53] Item 1, Business — Our Growth Strategies
  54. [54] Item 1, Business — Our Growth Strategies
  55. [55] Item 1, Business — Our Growth Strategies
  56. [56] Item 1, Business — Our Growth Strategies
  57. [57] Item 1, Business — Our Growth Strategies
  58. [58] Item 1, Business — Our Growth Strategies
  59. [59] Item 1, Business — Other Potential Opportunities
  60. [60] Item 1, Business — Our Growth Strategies
  61. [61] Item 7, MD&A — Gross Profit and Gross Margin
  62. [62] Item 7, MD&A — Selling and Marketing
  63. [63] Item 7, MD&A — Research and Development
  64. [64] Item 7, MD&A — General and Administrative
  65. [65] Item 7, MD&A — Funding Requirements
  66. [66] Item 1A, Risk Factors — Our audited financial statements for the years ended December 31, 2025 and December 31, 2024 include a footnote raising substantial doubt about our ability to continue as a “going concern” and we will likely need to raise additional financing to fund our business and revenue growth plans.
  67. [67] Item 7, MD&A — Funding Requirements
  68. [68] Item 1A, Risk Factors — Our audited financial statements for the years ended December 31, 2025 and December 31, 2024 include a footnote raising substantial doubt about our ability to continue as a “going concern” and we will likely need to raise additional financing to fund our business and revenue growth plans.
  69. [69] Item 7, MD&A — Contractual Obligations and Commitments
  70. [70] Item 1A, Risk Factors — We face substantial geopolitical and trade risks (including a possible trade war and imposition of tariffs and supply chain interruptions) and natural disaster risks associated with our business operations in Asia (particularly Taiwan and Japan).
  71. [71] Item 1A, Risk Factors — Our audited financial statements for the years ended December 31, 2025 and December 31, 2024 include a footnote raising substantial doubt about our ability to continue as a “going concern” and we will likely need to raise additional financing to fund our business and revenue growth plans.
  72. [72] Item 1A, Risk Factors — All of our revenues to date have been, and in the near-term will continue to be, generated from CapsoCam Plus related sales for the small bowel; and our ability to grow our small-bowel-related revenue is subject to our ability to successfully and timely execute related elements of our revenue growth strategy.
  73. [73] Item 1A, Risk Factors — We may not obtain or may experience delays in obtaining 510(k) clearance for our planned second generation of our CapsoCam Colon solution (with improved optics and other components), which would adversely impact our ability to commercialize this product and generate related revenue.
  74. [74] Item 1A, Risk Factors — Broad adoption of our CapsoCam Colon solution (once cleared) and growing related revenues depend on, among other things, expanding beyond CapsoCam Colon’s initial indicated patient population, increasing the accuracy of our initial CapsoCam Colon solution, and achieving and maintaining a satisfactory successful completion rate for capsule endoscopies using our CapsoCam Colon solution; and we may fail to successfully and timely execute related elements of our CapsoCam Colon adoption and revenue growth strategy.
  75. [75] Item 1A, Risk Factors — The effectiveness of our CapsoCam capsules heavily relies on patients adhering to our use protocols.
  76. [76] Item 1A, Risk Factors — There are risks associated with use of our CapsoCam capsules, including capsule retention, component failures and aspiration.
  77. [77] Item 1A, Risk Factors — There are risks associated with use of our CapsoCam capsules, including capsule retention, component failures and aspiration.
  78. [78] Item 1A, Risk Factors — Macroeconomic conditions could materially adversely affect our business, financial condition, results of operations, and prospects.
  79. [79] Item 1A, Risk Factors — We may face regulatory challenges and delays in obtaining 510(k) clearance for marketing of those CapsoCam capsules incorporating our self-developed AI technology, including our CapsoCam Colon capsule endoscopy solution and CapsoCam Plus capsule endoscopy solution (small bowel).
  80. [80] Item 1A, Risk Factors — If Medicare and other third-party payors, including managed care organizations, do not approve reimbursement for our products at adequate reimbursement rates, we may be unable to successfully commercialize our products which would likely have a material adverse effect on our business.
  81. [81] Item 1A, Risk Factors — We have identified two material weaknesses in our internal control over financial reporting. These material weaknesses could adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner.
  82. [82] Item 1A, Risk Factors — Our success will depend on our ability to obtain, maintain, enforce, and protect our intellectual property rights.

Analysis on 5/22/2026